TreatiseTreatise

Public Company Deskbook: Complying with Federal Governance & Disclosure Requirements (3rd Edition)

 by Robert E Buckholz, Marc R Trevino, Glen T Schleyer, Sullivan & Cromwell LLP
 
 Copyright: 2014-2017
 Last Updated: November 2017

 Product Details >> 

Product Details

  • ISBN Number: 9781402423154
  • Page Count: 2700
  • Number of Volumes: 3
  •  

Public Company Deskbook: Complying with Federal Governance & Disclosure Requirements provides expert counsel on how to deal effectively with the overlapping legislative, regulatory and private initiatives to reform public company governance and disclosure practices over the past decade. 

This book provides in-depth practical guidance centered around each of the following areas: Board Structure & Governance; Shareholder Meetings & Activism; Audit Committee, Auditor Policy & Auditor Disclosure; Compensation Committee, Compensation Policy & Compensation Disclosure; Public Company Reporting & Compliance; and Corporate Investigations & Whistleblowing. Included are numerous sample forms, checklists and documents, such as sample committee charters, director and officer questionnaires and annual meeting timelines for both NYSE- and Nasdaq-listed companies. Also addressed are current shareholder relations, including the prevalence, SEC-profile and outcome of common shareholder proposals, an analysis of proxy-advisor withhold recommendations and a comprehensive activist update. 

Written by three partners with Sullivan & Cromwell LLP, Public Company Deskbook is an indispensable resource for securities practitioners, compliance officers, directors, officers, accountants, auditors, and research analysts, and an important reference for securities regulators.
  Table of Contents
  Introduction
Chapter 1A: Director Independence
  • § 1A:1 : Overview1A-2
  • § 1A:2 : Text of Rules1A-3
    • § 1A:2.1 : Text of NYSE Rules Relating to Director Independence (Including NYSE Commentary)1A-3
    • § 1A:2.2 : Text of Nasdaq Rules Relating to Director Independence (Including Interpretations)1A-18
  • § 1A:3 : NYSE Director Independence Rules1A-31
    • § 1A:3.1 : Entities Subject to the Rules1A-31
    • § 1A:3.2 : Timing of Effectiveness and Phase-Ins1A-33
    • § 1A:3.3 : Application to Non-U.S. Issuers1A-35
    • § 1A:3.4 : Majority Independent Board1A-36
    • § 1A:3.5 : Executive Sessions1A-37
    • § 1A:3.6 : Direct Communications with Non-Management Directors1A-38
    • § 1A:3.7 : Bright-Line Independence Tests1A-38
      • [A] : Substantive Tests1A-38
      • [B] : Look-Back Period1A-43
    • § 1A:3.8 : Affirmative Independence Determinations1A-44
    • § 1A:3.9 : Disclosure of Categorical Standards1A-45
  • § 1A:4 : Nasdaq Director Independence Rules1A-45
    • § 1A:4.1 : Entities Subject to the Rules1A-45
    • § 1A:4.2 : Timing of Effectiveness and Phase-Ins1A-46
    • § 1A:4.3 : Application to Non-U.S. Issuers1A-47
    • § 1A:4.4 : Majority Independent Board1A-47
    • § 1A:4.5 : Executive Sessions1A-48
    • § 1A:4.6 : Definition of “Independent Director”1A-48
      • [A] : General Standard of Independence1A-48
      • [B] : Bright-Line Bars to Independence1A-49
  • § 1A:5 : Private Group Recommendations Regarding Director Independence1A-51
    • § 1A:5.1 : Heightened Definitions of Independence1A-51
    • § 1A:5.2 : Substantial Majority of Independent Directors1A-53
    • § 1A:5.3 : Independent Board Leadership1A-54
Chapter 1B: SEC Disclosure on Board Independence, Structure and Operation
  • § 1B:1 : Overview1B-2
  • § 1B:2 : Text of Rules1B-2
    • § 1B:2.1 : Text of Item 407(a) of Regulation S-K (Director Independence)1B-2
    • § 1B:2.2 : Text of Item 407(b) of Regulation S-K (Board Meetings and Committees)1B-5
    • § 1B:2.3 : Text of Item 407(f) of Regulation S-K (Shareholder Communications)1B-6
    • § 1B:2.4 : Text of Item 407(h) of Regulation S-K (Board Leadership Structure and Role in Risk Oversight)1B-7
    • § 1B:2.5 : Text of Instructions to Item 4071B-8
  • § 1B:3 : Director Independence Disclosure1B-8
  • § 1B:4 : Disclosure Regarding Board Meetings and Committees1B-11
  • § 1B:5 : Disclosure Regarding Shareholder Communications with the Board1B-12
  • § 1B:6 : Disclosure Regarding Board Leadership Structure1B-13
Chapter 1C: Corporate Governance Guidelines
  • § 1C:1 : Overview1C-1
  • § 1C:2 : Text of Rules1C-2
    • § 1C:2.1 : Text of Section 303A.09 (Including NYSE Commentary)1C-2
  • § 1C:3 : Sample Forms1C-4
    • § 1C:3.1 : Sample Corporate Governance Guidelines for NYSE-Listed Companies1C-4
    • § 1C:3.2 : Sample Corporate Governance Guidelines for Nasdaq-Listed Companies1C-13
  • § 1C:4 : Discussion of NYSE Rule1C-22
  • § 1C:5 : Other Topics Commonly Addressed in Governance Guidelines1C-24
  • § 1C:6 : Board Self-Evaluations1C-25
Chapter 1D: Nominating and Corporate Governance Committee
  • § 1D:1 : Overview1D-2
  • § 1D:2 : Text of Rules1D-2
    • § 1D:2.1 : Text of NYSE Rules Relating to Nominating and Corporate Governance Committees1D-2
    • § 1D:2.2 : Text of Nasdaq Rules Relating to Director Nominations1D-4
    • § 1D:2.3 : Text of SEC Disclosure Requirements Relating to Nominating Committees1D-5
      • [A] : Item 407(c) of Regulation S-K1D-5
      • [B] : Item 22(b)(15) of Schedule 14A1D-10
  • § 1D:3 : Sample Forms1D-11
    • § 1D:3.1 : Sample Nominating/Corporate Governance Committee Charter for NYSE-Listed U.S. Companies1D-11
    • § 1D:3.2 : Sample Nominations Committee Charter for Nasdaq-Listed U.S. Companies1D-15
  • § 1D:4 : Discussion of NYSE and Nasdaq Rules1D-19
    • § 1D:4.1 : NYSE Nominating/Corporate Governance Committee Rules1D-19
      • [A] : Scope and Timing of Requirement1D-19
      • [B] : Composition of the Committee1D-19
      • [C] : Duties and Responsibilities of the Committee1D-19
    • § 1D:4.2 : Nasdaq Rules Relating to Independent Director Oversight of Director Nominations1D-21
      • [A] : Scope and Timing of Requirement1D-21
      • [B] : Composition of the Committee1D-21
      • [C] : Duties and Responsibilities of the Committee1D-22
  • § 1D:5 : SEC Disclosure on Director Nomination Process1D-22
    • § 1D:5.1 : Background1D-22
    • § 1D:5.2 : Disclosure Regarding Nominating Committee Process1D-23
Chapter 1E: Board Committees
  • § 1E:1 : Overview1E-1
  • § 1E:2 : Text of State Law Statutes on Committee Functions1E-2
    • § 1E:2.1 : Section 141(c) of the Delaware General Corporation Law1E-2
    • § 1E:2.2 : Section 712 of the New York Business Corporation Law1E-4
    • § 1E:2.3 : Section 8.25 of the ABA Model Business Corporation Act (2016 Revision)1E-5
  • § 1E:3 : Sample Delaware Bylaw Provision on Committees1E-6
  • § 1E:4 : Committee Authority Under State Law1E-7
  • § 1E:5 : Common Committees at Public Companies1E-8
Chapter 1F: Related Party Transactions
  • § 1F:1 : Overview1
  • § 1F:2 : Text of Item 404(a) and (b) of Regulation S-K1
  • § 1F:3 : Sample Form of Related Party Transaction Policy6
  • § 1F:4 : Required Disclosure Under Item 404(a)10
    • § 1F:4.1 : Related Persons11
    • § 1F:4.2 : Amount Involved12
    • § 1F:4.3 : Direct or Indirect Material Interest13
    • § 1F:4.4 : Required Disclosure15
  • § 1F:5 : Related Person Transaction Approval Policies16
Chapter 1G: Codes of Ethics
  • § 1G:1 : Overview1G-2
  • § 1G:2 : Text of Rules1G-2
    • § 1G:2.1 : SEC Disclosure Rules Regarding Codes of Ethics1G-2
      • [A] : Item 406 of Regulation S-K1G-2
      • [B] : Item 5.05 of Form 8-K1G-4
    • § 1G:2.2 : Text of NYSE Rules Relating to Codes of Business Conduct and Ethics (Including NYSE Commentary)1G-5
    • § 1G:2.3 : Text of Nasdaq Rules Relating to Codes of Conduct (Including Interpretations)1G-7
  • § 1G:3 : Sample Form of Combined SEC and NYSE or Nasdaq Code of Ethics1G-9
    • § 1G:3.1 : Drafting Considerations1G-9
    • § 1G:3.2 : Sample Form1G-11
  • § 1G:4 : SEC Disclosure Rules Regarding Codes of Ethics for Senior Financial Officers1G-19
    • § 1G:4.1 : Required Disclosure1G-19
    • § 1G:4.2 : Definition of Code of Ethics1G-20
    • § 1G:4.3 : Public Availability of Code of Ethics1G-21
    • § 1G:4.4 : Amendments and Waivers1G-22
      • [A] : U.S. Companies1G-22
      • [B] : Non-U.S. Companies1G-23
    • § 1G:4.5 : Registered Investment Companies1G-23
  • § 1G:5 : NYSE Code of Ethics Requirement1G-24
    • § 1G:5.1 : Entities Subject to the Rule1G-24
    • § 1G:5.2 : Discussion of the Rule1G-25
  • § 1G:6 : Nasdaq Code of Conduct Requirement1G-26
    • § 1G:6.1 : Entities Subject to the Rule1G-26
    • § 1G:6.2 : Discussion of the Rule1G-26
  • § 1G:7 : Interplay between SEC Item 406 Requirements and NYSE/Nasdaq Requirements1G-27
  • § 1G:8 : Effective Compliance and Ethics Program Under Federal Sentencing Guidelines1G-28
Chapter 2A: Annual Meeting Timeline and Script
  • § 2A:1 : Overview2A-1
  • § 2A:2 : Illustrative Proxy and Annual Meeting Timeline2A-2
  • § 2A:3 : Preparing for and Handling Meeting Disruptions2A-6
  • § 2A:4 : Illustrative Annual Meeting Script2A-8
    • § 2A:4.1 : Standard Script2A-8
      • [A] : Welcome and Call to Order2A-8
      • [B] : Introductions2A-9
      • [C] : Report on Notice, Quorum and Opening of Polls2A-9
      • [D] : Operation of Meeting2A-9
      • [E] : Presentation of Proposals2A-10
      • [F] : Closing of Polls2A-11
      • [G] : Financial or Other Company Presentation, If Any2A-11
      • [H] : General Q&A Session2A-12
      • [I] : Results of Voting2A-12
      • [J] : Adjournment2A-12
    • § 2A:4.2 : Disorderly Conduct Warnings2A-12
    • § 2A:4.3 : Temporary Adjournment2A-13
    • § 2A:4.4 : Immediate Permanent Adjournment2A-13
  • § 2A:5 : Illustrative Annual Meeting Agenda and Rules of Conduct2A-14
Chapter 2B: Federal Proxy Rules
  • § 2B:1 : Overview2B-2
  • § 2B:2 : Text of Key Proxy Rule Provisions2B-3
    • § 2B:2.1 : Rule 14a-1. Definitions2B-3
    • § 2B:2.2 : Rule 14a-2. Solicitations to Which § 240.14a-3 to § 240.14a-15 Apply2B-5
    • § 2B:2.3 : Rule 14a-3. Information to Be Furnished to Security Holders2B-13
    • § 2B:2.4 : Rule 14a-4. Requirements As to Proxy2B-22
    • § 2B:2.5 : Rule 14a-5. Presentation of Information in Proxy Statement2B-26
    • § 2B:2.6 : Rule 14a-6. Filing Requirements2B-28
    • § 2B:2.7 : Rule 14a-7. Obligations of Registrant to Provide a List of, or Mail Soliciting Material to, Security Holders2B-34
    • § 2B:2.8 : Rule 14a-8. Shareholder Proposals2B-38
    • § 2B:2.9 : Rule 14a-9. False or Misleading Statements2B-38
    • § 2B:2.10 : Rule 14a-10. Prohibition of Certain Solicitations2B-40
    • § 2B:2.11 : Rule 14a-11. Shareholder Nominations2B-40
    • § 2B:2.12 : Rule 14a-12. Solicitation Before Sending Proxy2B-40
    • § 2B:2.13 : Rule 14a-13. Communicating with Beneficial Owners2B-42
    • § 2B:2.14 : Rule 14a-14. Modified or Superseded Documents2B-46
    • § 2B:2.15 : Rule 14a-15. Differential and Contingent Compensation in Connection with Roll-up Transactions2B-47
    • § 2B:2.16 : Rule 14a-16. Internet Availability of Proxy Materials2B-47
    • § 2B:2.17 : Rule 14a-17. Electronic Shareholder Forums2B-55
    • § 2B:2.18 : Rule 14b-1. Obligation of Registered Brokers and Dealers in Connecting of Certain Communications to Beneficial Owners2B-55
    • § 2B:2.19 : Rule 14b-2. Obligation of Banks, Associations and Other Entities That Exercise Fiduciary Powers in Connection with the Prompt Forwarding of Certain Communications to Beneficial Owners2B-61
  • § 2B:3 : Scope of the Proxy Rules Under Rule 14a-22B-69
    • § 2B:3.1 : Definition of Solicitation2B-69
    • § 2B:3.2 : Exemptions from the Proxy Rules2B-70
  • § 2B:4 : Information to Be Furnished to Security Holders Under Rule 14a-32B-71
  • § 2B:5 : Requirements As to Proxy Card Under Rule 14a-42B-73
  • § 2B:6 : Presentation of Information in Proxy Statement Under Rule 14a-52B-74
  • § 2B:7 : Filing Requirements Under Rule 14a-62B-74
  • § 2B:8 : Providing List of, or Mailing to, Security Holders Under Rule 14a-72B-76
  • § 2B:9 : Proposals of Security Holders Under Rule 14a-82B-77
  • § 2B:10 : False or Misleading Statements Under Rule 14a-92B-77
  • § 2B:11 : Solicitation Before Sending Proxy Under Rule 14a-122B-78
  • § 2B:12 : Communicating with Beneficial Owners Under Rule 14a-132B-79
  • § 2B:13 : Internet Availability of Proxy Materials Under Rule 14a-162B-79
    • § 2B:13.1 : Notice Only Option2B-80
    • § 2B:13.2 : Full Set Delivery Option2B-82
  • § 2B:14 : Electronic Shareholder Forums Under Rule 14a-172B-82
  • § 2B:15 : Schedule 14A Information Required in Proxy Statement2B-83
  • § 2B:16 : Potential Changes to Proxy System2B-83
    • § 2B:16.1 : SEC Proxy System Modernization Initiative and Proxy Advisory Committee2B-83
    • § 2B:16.2 : SEC Proposal on Mandatory Universal Proxy Cards2B-85
      • [A] : Background2B-85
      • [B] : Highlights of the Proposal2B-88
      • [C] : Potential Implications2B-90
Chapter 2C: Director and Officer Questionnaires
  • § 2C:1 : Overview2C-1
  • § 2C:2 : Considerations2C-2
  • § 2C:3 : Annotated Sample Form2C-5
    • § 2C:3.1 : Instructions for Preparation and Distribution of the Questionnaire2C-5
    • § 2C:3.2 : Form of Transmittal Letter2C-8
    • § 2C:3.3 : Questions2C-9
      • [A] : General2C-11
      • [B] : Family Relationships2C-16
      • [C] : Directorships2C-18
      • [D] : Legal Proceedings2C-20
      • [E] : Security Ownership2C-26
      • [F] : Business Relationships2C-31
      • [G] : Compensation2C-34
      • [H] : Transactions2C-37
      • [I] : Certification and Consent2C-44
      • [J] : Definitions and Explanatory Notes2C-44
      • [K] : List of Subsidiaries (Annex A to Questionnaire)2C-52
      • [L] : Compensation Committee Interlocks (Annex B to Questionnaire)2C-52
Chapter 2D: Voting Standards
  • § 2D:1 : Overview2D-1
  • § 2D:2 : Limitations on Broker Discretionary Voting2D-1
    • § 2D:2.1 : Text of NYSE Rules on Discretionary Voting2D-1
    • § 2D:2.2 : Broker Voting Generally2D-14
    • § 2D:2.3 : Broker Voting on Election of Directors2D-16
    • § 2D:2.4 : Broker Voting on Executive Compensation Under Dodd-Frank2D-17
    • § 2D:2.5 : NYSE Policy on “Good Governance” Proposals2D-18
  • § 2D:3 : Majority Voting2D-19
    • § 2D.3:1 : Background and Development2D-19
    • § 2D:3.2 : Considerations2D-20
    • § 2D:3.3 : Shareholder Proposals2D-22
  • § 2D:4 : Dissemination of Interim Voting Results2D-22
Chapter 2E: Advance Notice Bylaws
  • § 2E:1 : Overview2E-1
  • § 2E:2 : Sample Form of Advance Notice Bylaw for a Delaware Corporation2E-2
  • § 2E:3 : Right of Shareholders to Raise Business at Meetings2E-6
    • § 2E:3.1 : Enforceability of Advance Notice Bylaws2E-7
    • § 2E:3.2 : Interplay Between Advance Notice Bylaws and Rule 14a-82E-8
  • § 2E:4 : Matters Potentially Covered by Advance Notice Bylaws2E-9
    • § 2E:4.1 : Scope of Advance Notice Requirement2E-9
    • § 2E:4.2 : Advance Notice Deadlines2E-10
    • § 2E:4.3 : Ownership Requirements2E-10
      • [A] : Record Holder Versus Beneficial Owner2E-10
      • [B] : Disclosure of Derivative Positions2E-11
      • [C] : Other Potential Disclosure Requirements2E-12
  • § 2E:5 : Judicial Interpretation of Advance Notice Bylaws2E-13
    • § 2E:5.1 : JANA Master Fund, Ltd. v. CNET Networks, Inc.2E-13
    • § 2E:5.2 : Levitt Corp. v. Office Depot, Inc.2E-16
Chapter 2F: Rule 14a-8 Shareholder Proposals
  • § 2F:1 : Overview2F-3
  • § 2F:2 : Text of Rule 14a-82F-4
  • § 2F:3 : Sample Form of Deficiency Letter2F-12
  • § 2F:4 : Procedural Requirements of Rule 14a-82F-14
    • § 2F:4.1 : Stock Ownership Threshold2F-15
      • [A] : Determination of Value2F-15
      • [B] : Proof of Indirect Ownership2F-15
      • [C] : Expression of Intent to Hold2F-17
    • § 2F:4.2 : Prohibition on Multiple Proposals2F-17
    • § 2F:4.3 : 500-Word Limit2F-18
    • § 2F:4.4 : Deadline for Proposals2F-19
    • § 2F:4.5 : Submission of Revised Proposals2F-20
    • § 2F:4.6 : Withdrawal of Joint Proposals2F-21
  • § 2F:5 : Addressing Procedural Deficiencies2F-21
  • § 2F:6 : SEC No-Action Process2F-23
  • § 2F:7 : Rule 14a-8 Litigation2F-25
    • § 2F:7.1 : Earlier Fifth Circuit Victories for Corporations2F-25
    • § 2F:7.2 : More Recent Losses for Corporations Outside the Fifth Circuit2F-27
    • § 2F:7.3 : Choosing Between the Federal Courts and the No-Action Process2F-28
  • § 2F:8 : Shareholder Publicity Trends2F-30
    • § 2F:8.1 : Voluntary Use of EDGAR Filings2F-30
    • § 2F:8.2 : Shareholder Mailings Through Broadridge2F-31
    • § 2F:8.3 : Use of Website with Additional Information2F-32
    • § 2F:8.4 : SEC Guidance on Tweets2F-34
  • § 2F:9 : Substantive Bases for Exclusion of Shareholder Proposals2F-34
    • § 2F:9.1 : Improper Under State Law2F-34
      • [A] : Precatory Versus Mandatory Proposals2F-35
      • [B] : Mandatory Bylaw Amendments2F-37
      • [C] : Certification to State Court—The 2008 CA, Inc. Decision2F-38
    • § 2F:9.2 : Violation of Law2F-41
    • § 2F:9.3 : Violation of Proxy Rules2F-43
    • § 2F:9.4 : Personal Grievance; Special Interest2F-45
    • § 2F:9.5 : Relevance2F-46
    • § 2F:9.6 : Absence of Power/Authority2F-47
      • [A] : Charter Amendments2F-48
      • [B] : Director Independence and Other Director Qualifications2F-48
    • § 2F:9.7 : Management Functions2F-49
      • [A] : General Discussion2F-49
      • [B] : 2015 Trinity Wall Street Decision2F-51
        • [B][1] : Background2F-51
        • [B][2] : Ultimate Subject Matter That Relates to Ordinary Business Operations2F-52
        • [B][3] : Significant Social Policy Issues That Transcend Day-to-Day Business Matters2F-53
        • [B][4] : SEC Staff Response2F-55
      • [C] : Compensation Matters2F-56
      • [D] : Health, Environmental and Other Risks2F-57
      • [E] : CEO Succession Planning2F-59
      • [F] : Notable Staff Positions on Significant Policy Issues2F-59
    • § 2F:9.8 : Director Elections2F-61
    • § 2F:9.9 : Anti-Duplication Exclusions2F-63
      • [A] : Directly Conflicting2F-63
        • [A][1] : 2015 Suspension of Staff Guidance2F-64
        • [A][2] : Revised Staff Approach per SLB 14H2F-66
      • [B] : Substantially Implemented2F-68
      • [C] : Duplicative Proposals2F-70
    • § 2F:9.10 : Resubmissions2F-71
    • § 2F:9.11 : Specific Amount of Dividends2F-72
  • § 2F:10 : Common Shareholder Proposals Relating to Corporate Governance2F-72
    • § 2F:10.1 : Voting Structure2F-74
      • [A] : Majority Voting2F-74
        • [A][1] : Voting Results2F-74
        • [A][2] : Considerations2F-75
        • [A][3] : Selected Investor Voting Policies2F-76
      • [B] : Rescission of Supermajority Voting2F-78
        • [B][1] : Voting Results2F-78
        • [B][2] : Considerations2F-78
        • [B][3] : Selected Investor Voting Policies2F-79
      • [C] : Shareholder Right to Call a Special Meeting2F-80
        • [C][1] : Voting Results2F-80
        • [C][2] : Considerations2F-81
        • [C][3] : Potential Terms for a Management Proposal2F-82
        • [C][4] : Selected Investor Voting Policies2F-85
      • [D] : Shareholder Right to Act by Written Consent2F-87
        • [D][1] : Voting Results2F-87
        • [D][2] : Considerations2F-87
        • [D][3] : Potential Terms for a Management Proposal2F-88
        • [D][4] : Selected Investor Voting Policies2F-90
      • [E] : Proxy Access2F-92
        • [E][1] : Voting Results2F-92
        • [E][2] : Proxy Access Proponents2F-94
        • [E][3] : Proposals to Amend Proxy Access Terms2F-95
        • [E][4] : Key Proxy Access Developments and Terms2F-96
        • [E][5] : Selected Investor Voting Policies2F-97
    • § 2F:10.2 : Board Structure2F-99
      • [A] : Board Declassification2F-99
        • [A][1] : Voting Results2F-99
        • [A][2] : Considerations2F-100
        • [A][3] : Selected Investor Voting Policies2F-100
      • [B] : Separating Roles of CEO and Chairperson2F-102
        • [B][1] : Voting Results2F-102
        • [B][2] : Considerations2F-102
        • [B][3] : Selected Investor Voting Policies2F-104
    • § 2F:10.3 : Proposals on Board Composition2F-107
      • [A] : Increase Board Diversity2F-107
      • [B] : Director Qualifications2F-111
      • [C] : Director Tenure2F-112
    • § 2F:10.4 : Less Successful Governance Proposals2F-113
    • § 2F:10.5 : Social and Political Proposals2F-114
    • § 2F:10.6 : Compensation-Related Proposals2F-115
  • § 2F:11 : Categories of Shareholder Proponents2F-116
Chapter 2G: Shareholder Nominations and Proxy Access
  • § 2G:1 : Overview2G-2
  • § 2G:2 : Text of Rules and Sample Proxy Access Bylaw2G-2
    • § 2G:2.1 : Text of SEC Rules Related to Proxy Access2G-2
    • § 2G:2.2 : Text of Delaware General Corporation Law Sections 112 and 1132G-14
    • § 2G:2.3 : Sample Form of Proxy Access Bylaw2G-15
  • § 2G:3 : Background2G-27
  • § 2G:4 : Proxy Access and Director Nominations Under State Law2G-30
    • § 2G:4.1 : North Dakota Publicly Traded Corporations Act2G-31
    • § 2G:4.2 : Delaware General Corporation Law2G-31
      • [A] : Background2G-31
      • [B] : Delaware Provisions on Bylaws Concerning Stockholder Access to Proxy Materials2G-32
      • [C] : Delaware Provisions on Bylaws Concerning Reimbursement of Proxy Solicitation Expenses2G-33
  • § 2G:5 : Proxy Access Rules2G-34
    • § 2G:5.1 : Background2G-34
    • § 2G:5.2 : Impact of Amendment to Rule 14a-8 Election Exclusion2G-35
      • [A] : Growth of Proxy Access Shareholder Proposals2G-36
      • [B] : Key Proxy Access Terms and Emergence of Market Trends2G-37
      • [C] : Steps to Take in Response to Proxy Access Developments2G-44
      • [D] : Factors Affecting Use of Proxy Access2G-45
    • § 2G:5.3 : Schedule 14N Disclosures for a Proxy Access Nomination2G-47
    • § 2G:5.4 : Disclosure Liability2G-49
    • § 2G:5.5 : Preliminary Proxy Filing Requirements2G-49
Chapter 2H: Director Qualification Bylaws
  • § 2H:1 : Overview2H-1
  • § 2H:2 : Text of State Law Statutes on Director Qualifications2H-2
    • § 2H:2.1 : Section 141(b) of the Delaware General Corporation Law2H-2
    • § 2H:2.2 : Section 701 of the New York Business Corporation Law2H-3
    • § 2H:2.3 : Section 8.02 of the ABA Model Business Corporation Act2H-3
  • § 2H:3 : Permissibility of Director Qualifications2H-3
  • § 2H:4 : Potential Director Qualifications2H-4
Chapter 2I: Analysis of ISS Withhold Recommendations
  • § 2I:1 : Overview2I-1
  • § 2I:2 : Impact of Withhold Recommendations2I-2
  • § 2I:3 : Common Reasons for Negative Recommendations2I-5
    • § 2I:3.1 : Board Independence2I-5
    • § 2I:3.2 : Newly Public Company with Adverse Governance Provisions2I-6
    • § 2I:3.3 : Shareholder Inability to Amend Bylaws2I-7
    • § 2I:3.4 : Board Responsiveness to Shareholders2I-7
    • § 2I:3.5 : Lack of Formal Nominating Committee2I-8
    • § 2I:3.6 : Compensation Issues2I-8
    • § 2I:3.7 : Poor Attendance2I-9
    • § 2I:3.8 : Pledging by Insiders2I-10
    • § 2I:3.9 : Overboarding2I-11
    • § 2I:3.10 : Poison Pill Issues2I-12
    • § 2I:3.11 : Material Weakness Issues2I-12
    • § 2I:3.12 : Unilateral Action by the Board2I-12
Chapter 2J: Shareholder Approval of Equity Compensation Plans
  • § 2J:1 : Overview2J-2
  • § 2J:2 : Text of Rules2J-2
    • § 2J:2.1 : Text of NYSE Rules Relating to Shareholder Approval of Equity Compensation Plans (Including NYSE Commentary)2J-2
    • § 2J:2.2 : Text of Nasdaq Rules Relating to Shareholder Approval of Equity Compensation Plans (Including Interpretations)2J-10
  • § 2J:3 : NYSE Rules on Shareholder Approval of Equity Compensation Plans2J-15
    • § 2J:3.1 : Background and Scope2J-15
    • § 2J:3.2 : Treatment of Plans Adopted Pre-2003 and Plans Adopted Pre-Listing2J-16
    • § 2J:3.3 : Covered Equity Compensation Plans2J-17
    • § 2J:3.4 : Formula Plans2J-18
    • § 2J:3.5 : Discretionary Plans2J-20
    • § 2J:3.6 : Exemptions from the Shareholder Approval Requirement2J-21
      • [A] : Categories of Exemptions2J-21
      • [B] : Director Approval of Exempted Plans2J-23
      • [C] : Disclosure2J-24
    • § 2J:3.7 : Material Revisions to Plans2J-24
      • [A] : Examples of Material and Immaterial Revisions2J-24
      • [B] : Repricings2J-26
    • § 2J:3.8 : Applicable Voting Standard and Elimination of Quorum Requirement2J-27
  • § 2J:4 : Nasdaq Rule on Shareholder Approval of Equity Compensation2J-28
    • § 2J:4.1 : Background and Scope2J-28
    • § 2J:4.2 : Effectiveness and Treatment of Pre-2003 Plans2J-29
    • § 2J:4.3 : Covered Equity Compensation Plans2J-30
    • § 2J:4.4 : Open-End Plans2J-30
    • § 2J:4.5 : Formula Plans2J-30
    • § 2J:4.6 : Exceptions from the Shareholder Approval Requirement2J-31
    • § 2J:4.7 : Material Amendments to Plans2J-32
  • § 2J:5 : SEC Rules Relating to Disclosure of Equity Compensation Plan Information2J-33
    • § 2J:5.1 : Summary of SEC Rules2J-34
    • § 2J:5.2 : Interplay of SEC Rules with NYSE and Nasdaq Rules2J-35
      • [A] : Definition of Equity Compensation Plan2J-35
      • [B] : Disclosure of Consequences of Shareholder Approval2J-35
  • § 2J:6 : Equity Compensation Plan Voting Results2J-36
Chapter 2K: Shareholder Approval of Issuances Over 20%
  • § 2K:1 : Overview2K-1
  • § 2K:2 : Text of Rules2K-2
    • § 2K:2.1 : Text of NYSE Rules Relating to Shareholder Approval of Issuances Over 20%2K-2
    • § 2K:2.2 : Text of Nasdaq Rules Relating to Shareholder Approval of Issuances Over 20%2K-5
  • § 2K:3 : Discussion of NYSE Rule2K-13
    • § 2K:3.1 : Importance of Early Consideration and Consultation2K-13
    • § 2K:3.2 : Calculation of 20%2K-14
    • § 2K:3.3 : Vote Required2K-14
    • § 2K:3.4 : Exceptions2K-15
  • § 2K:4 : Discussion of Nasdaq Rule2K-16
    • § 2K:4.1 : Importance of Early Consideration and Consultation2K-16
    • § 2K:4.2 : Calculation of 20%2K-17
    • § 2K:4.3 : Vote Required2K-18
    • § 2K:4.4 : Aggregation of Separate Transactions2K-18
    • § 2K:4.5 : Use of Share Caps2K-19
    • § 2K:4.6 : Exceptions2K-20
Chapter 2L: Shareholder Approval of Insider and Change of Control Issuances
  • § 2L:1 : Overview2I-1
  • § 2L:2 : Text of Rules2I-2
    • § 2L:2.1 : Text of NYSE Rules Relating to Insider and Change of Control Issuances2I-2
    • § 2L:2.2 : Text of Nasdaq Rules Relating to Insider and Change of Control Issuances2I-5
  • § 2L:3 : Discussion of NYSE Rules2I-7
    • § 2L:3.1 : Issuances to Insiders2I-7
    • § 2L:3.2 : Change of Control Issuances2I-9
    • § 2L:3.3 : Voting Standard and Financial Viability Exception2I-9
  • § 2L:4 : Discussion of Nasdaq Rules2I-9
    • § 2L:4.1 : Issuances to Insiders2I-9
    • § 2L:4.2 : Change of Control Issuances2I-10
    • § 2L:4.3 : Voting Standard and Financial Viability Exception2I-10
    • § 2L:4.4 : Nasdaq Request for Comments on Shareholder Approval Rules2I-10
Chapter 2M: Shareholder Activism: 2016 Review and Analysis
  • § 2M:1 : Overview2M-2
  • § 2M:2 : General Observations on the State of Shareholder Activism2M-3
  • § 2M:3 : Institutional Investors2M-4
    • § 2M:3.1 : Shift from Retail to Institutional Ownership2M-5
    • § 2M:3.2 : Shift to Index Investing2M-6
    • § 2M:3.3 : Concentration Among Largest Institutional Investors2M-6
    • § 2M:3.4 : Institutional Investor Engagement Efforts2M-7
  • § 2M:4 : Activist Investors2M-9
    • § 2M:4.1 : Total Activist Campaigns2M-9
    • § 2M:4.2 : Assets Under Management by Activist Hedge Funds2M-10
    • § 2M:4.3 : Activist Hedge Fund Withdrawals and Redemptions2M-10
    • § 2M:4.4 : Activist Hedge Fund Performance2M-11
    • § 2M:4.5 : Formation of Activist Hedge Funds2M-11
    • § 2M:4.6 : Increase in Activist Campaigns Brought by Less-Frequent Activists2M-11
    • § 2M:4.7 : Frequent Activist Investors2M-12
    • § 2M:4.8 : Prominent Activist Investors2M-13
    • § 2M:4.9 : Most Successful Activists by Board Seats Obtained2M-13
  • § 2M:5 : Target Companies2M-14
    • § 2M:5.1 : Target Companies by Market Capitalization2M-14
    • § 2M:5.2 : Industries of Target Companies2M-14
  • § 2M:6 : Types and Objectives of Activist Campaigns2M-15
    • § 2M:6.1 : Frequency of Different Campaign Types2M-15
    • § 2M:6.2 : Underlying Objectives of Activist Campaigns2M-15
    • § 2M:6.3 : Tactics Used by Activists2M-16
    • § 2M:6.4 : Structural and Behavioral Actions Used by Companies in Response to Activism2M-16
  • § 2M:7 : Proxy Contests2M-17
    • § 2M:7.1 : How Often Are Proxy Contests Settled?2M-17
    • § 2M:7.2 : Results of Recent Proxy Contests2M-18
    • § 2M:7.3 : How Do Proxy Advisory Firm Recommendations Impact a Proxy Contest?2M-20
    • § 2M:7.4 : What Occurs in the Aftermath of a Proxy Contest?2M-21
  • § 2M:8 : Settlement Agreements2M-21
    • § 2M:8.1 : Frequency and Speed of Settlement Agreements2M-21
    • § 2M:8.2 : Minimum Shareholding and Director Pre-Resignation Provisions2M-22
    • § 2M:8.3 : Standstill Provisions2M-23
    • § 2M:8.4 : Voting Agreements2M-26
    • § 2M:8.5 : Information Sharing2M-26
    • § 2M:8.6 : Expense Reimbursement2M-27
  • § 2M:9 : Other Activism Developments2M-27
    • § 2M:9.1 : Universal Proxy Cards2M-27
    • § 2M:9.2 : Proxy Access2M-29
      • [A] : Proxy Access and Proxy Contests at the Same Meeting2M-29
      • [B] : Proxy Access as an Alternative to Proxy Contests2M-30
  • § 2M:10 : Steps Companies Should Take2M-30
Chapter 3A: Audit Committee Responsibilities and Authority
  • § 3A:1 : Overview3A-3
  • § 3A:2 : Text of Rules Regarding Audit Committee Responsibilities and Authority3A-3
    • § 3A:2.1 : Text of Rule 10A-3 Under the Exchange Act3A-3
    • § 3A:2.2 : Text of Regulation S-X Rule 2-073A-11
    • § 3A:2.3 : Text of NYSE Rules Relating to Audit Committee Responsibilities3A-11
    • § 3A:2.4 : Text of Nasdaq Rules Relating to Audit Committee Responsibilities3A-17
    • § 3A:2.5 : Text of PCAOB Rule on Communication Concerning Auditor Independence3A-19
  • § 3A:3 : Sample Audit Committee Charter for Listed U.S. Companies3A-20
  • § 3A:4 : Audit Committee Responsibilities Under Rule 10A-33A-34
    • § 3A:4.1 : Background3A-34
    • § 3A:4.2 : Scope of Rule 10A-3 Requirement3A-36
      • [A] : Issuers Subject to Rule 10A-33A-36
        • [A][1] : Non-U.S. Companies3A-36
        • [A][2] : OTC Companies3A-36
        • [A][3] : Registered Investment Companies3A-36
        • [A][4] : Issuers Exempt from the Rule3A-37
        • [A][5] : Limited Partnerships and Limited Liability Companies3A-37
      • [B] : Securities Subject to the Rule3A-37
      • [C] : Multiple Listings3A-38
    • § 3A:4.3 : Responsibilities and Authority of the Audit Committee3A-38
      • [A] : Selection and Oversight of Independent Auditors3A-38
      • [B] : Authority to Engage Advisors3A-39
      • [C] : Adequate Funding3A-39
      • [D] : Selection and Oversight of Accounting Firms Other Than the Independent Auditors3A-40
    • § 3A:4.4 : Special Provisions for Non-U.S. Issuers3A-40
      • [A] : Alternative Auditor Oversight Structures3A-41
      • [B] : Dual Holding Companies3A-42
      • [C] : Exercise of Audit Committee Responsibilities by Shareholders and the Board of Directors3A-43
  • § 3A:5 : NYSE Listing Requirements3A-44
    • § 3A:5.1 : Timing of Effectiveness3A-44
    • § 3A:5.2 : Entities Subject to the Rules3A-44
    • § 3A:5.3 : Application to Non-U.S. Issuers3A-45
    • § 3A:5.4 : Authority and Responsibility of the Audit Committee3A-46
      • [A] : NYSE Requirements Generally3A-46
      • [B] : Audit Committee Role in Risk Oversight3A-49
  • § 3A:6 : Nasdaq Listing Requirements3A-50
    • § 3A:6.1 : Timing of Effectiveness3A-50
    • § 3A:6.2 : Entities Subject to the Rules3A-50
    • § 3A:6.3 : Application to Non-U.S. Issuers3A-51
    • § 3A:6.4 : Authority and Responsibility of the Audit Committee3A-51
    • § 3A:6.5 : Approval of Related Party Transactions3A-52
  • § 3A:7 : Communications with Audit Committee Under SEC and PCAOB Rules3A-52
    • § 3A:7.1 : Rule 2-07 of Regulation S-X3A-52
      • [A] : Overview of Rule3A-52
      • [B] : Critical Accounting Policies and Practices3A-54
      • [C] : Alternative Accounting Treatments3A-56
      • [D] : Other Material Written Communications3A-57
      • [E] : Registered Investment Companies3A-58
    • § 3A:7.2 : PCAOB Audit Committee Communication Requirements3A-59
      • [A] : Communications Concerning Auditor Independence3A-59
      • [B] : GAAS Requirements Related to Audit Committee Communications3A-60
        • [B][1] : Auditing Standard No. 163A-60
        • [B][2] : Auditing Standard No. 183A-62
      • [C] : Communications Relating to Audit Firm Inspections3A-63
        • [C][1] : Overview3A-63
        • [C][2] : PCAOB Inspections of Public Company Auditors3A-64
        • [C][3] : Inspection-Related Communications with Audit Firms3A-65
        • [C][4] : Potential Areas for Inquiry As a Result of PCAOB Inspections3A-65
      • [D] : Other PCAOB Guidance Relevant to Audit Committees3A-67
      • [E] : Potential Implications of Reproposed Auditing Standard Relating to the Form of the Auditor’s Report3A-69
Chapter 3B: Audit Committee Composition
  • § 3B:1 : Overview3B-2
  • § 3B:2 : Text of Requirements3B-2
    • § 3B:2.1 : Text of Rule 10A-3 Under the Exchange Act3B-2
    • § 3B:2.2 : Text of NYSE Rules Relating to Audit Committee Composition3B-10
    • § 3B:2.3 : Text of Nasdaq Rules Relating to Audit Committee Composition3B-11
  • § 3B:3 : Audit Committee Composition Requirements Under Rule 10A-33B-15
    • § 3B:3.1 : Background and Scope of Requirement3B-15
    • § 3B:3.2 : Criteria for Independence3B-15
      • [A] : Prohibition on Compensatory Fees3B-16
      • [B] : “Affiliated Person”3B-17
        • [B][1] : Safe Harbor3B-18
        • [B][2] : Affiliates of Affiliates3B-18
    • § 3B:3.3 : Exemptions from the Independence Requirements3B-19
    • § 3B:3.4 : Opportunity to Cure Defects3B-22
  • § 3B:4 : NYSE Listing Requirements3B-22
    • § 3B:4.1 : Timing of Effectiveness3B-22
    • § 3B:4.2 : Entities Subject to the Rules3B-23
    • § 3B:4.3 : Application to Non-U.S. Issuers3B-24
    • § 3B:4.4 : Independence and Other Qualifications3B-24
      • [A] : Independence3B-25
      • [B] : Service on Other Audit Committees3B-25
      • [C] : Financial Literacy3B-25
  • § 3B:5 : Nasdaq Listing Requirements3B-25
    • § 3B:5.1 : Timing of Effectiveness3B-26
    • § 3B:5.2 : Entities Subject to the Rules3B-26
    • § 3B:5.3 : Application to Non-U.S. Issuers3B-27
    • § 3B:5.4 : Independence and Other Qualifications3B-27
      • [A] : Independence3B-27
      • [B] : Financial Literacy3B-28
Chapter 3C: Audit Committee Disclosure
  • § 3C:1 : Overview3C-2
  • § 3C:2 : Text of SEC, NYSE and Nasdaq Rules Concerning Audit Committee Disclosure3C-3
    • § 3C:2.1 : Text of Rule 10A-3(d) Under the Exchange Act3C-3
    • § 3C:2.2 : Text of Item 407(d) of Regulation S-K3C-3
    • § 3C:2.3 : Text of Item 22 of Schedule 14A3C-8
    • § 3C:2.4 : Excerpts from NYSE Rules Relating to Audit Committee Disclosure3C-11
    • § 3C:2.5 : Excerpts from Nasdaq Rules Relating to Audit Committee Disclosure3C-11
  • § 3C:3 : Audit Committee Disclosure Requirements Under SEC Rules3C-12
    • § 3C:3.1 : Disclosure Regarding Exemptions3C-13
    • § 3C:3.2 : Identification of the Audit Committee in Annual Reports3C-13
    • § 3C:3.3 : Audit Committee Disclosure in Proxy or Information Statements3C-14
    • § 3C:3.4 : Sample Audit Committee Report3C-14
    • § 3C:3.5 : SEC Concept Release on Audit Committee Disclosure3C-17
      • [A] : Audit Committee’s Oversight of the Auditor3C-17
      • [B] : Audit Committee Process for Appointing or Retaining the Auditor3C-18
      • [C] : Qualifications of the Audit Firm and Members of the Engagement Team3C-19
      • [D] : General Questions Regarding Audit Committee Disclosure3C-20
  • § 3C:4 : Audit Committee Financial Expert Disclosure3C-21
    • § 3C:4.1 : Background and Legislative History3C-21
    • § 3C:4.2 : Required Disclosure3C-22
    • § 3C:4.3 : Definition of Audit Committee Financial Expert3C-23
      • [A] : Five Required Attributes3C-23
      • [B] : How Attributes Can Be Acquired3C-25
        • [B][1] : Active Supervision3C-25
        • [B][2] : Other Relevant Experience3C-26
        • [B][3] : No Presumptive Experience3C-26
        • [B][4] : Facts-and-Circumstances Determination3C-26
    • § 3C:4.4 : Safe Harbor3C-28
    • § 3C:4.5 : Non-U.S. Issuers3C-29
    • § 3C:4.6 : Registered Investment Companies3C-30
    • § 3C:4.7 : Relationship to NYSE and Nasdaq Standards3C-31
    • § 3C:4.8 : Possible Approach for Companies Without an Audit Committee Financial Expert3C-31
Chapter 3D: Whistleblower Complaint Procedures
  • § 3D:1 : Overview3D-1
  • § 3D:2 : Text of Requirements3D-2
    • § 3D:2.1 : Text of Rule 10A-3(b)(3) Under the Exchange Act3D-2
    • § 3D:2.2 : Text of Item 407(f) of Regulation S-K (Shareholder Communications)3D-2
    • § 3D:2.3 : Excerpt from NYSE Rules Relating to Board Communication3D-3
  • § 3D:3 : Requirements of SOA Section 301 and Rule 10A-33D-4
    • § 3D:3.1 : Background and Scope of Requirement3D-4
    • § 3D:3.2 : Establishment of Complaint Procedures3D-4
    • § 3D:3.3 : NYSE Rules on Communication with Non-Management Directors3D-5
    • § 3D:3.4 : SEC Disclosure Requirements Regarding Shareholder Communications3D-5
  • § 3D:4 : Sample Audit Committee Complaint Procedures3D-5
Chapter 3E: Auditor Independence and Non-Audit Services
  • § 3E:1 : Overview3E-4
  • § 3E:2 : Prohibited Non-Audit Services (SOA Section 201, Regulation S-X Rule 2-01(c)(4))3E-6
    • § 3E:2.1 : Text of the Requirements3E-6
      • [A] : SOA Section 2013E-6
      • [B] : Regulation S-X Rule 2-01(c)(4)3E-7
    • § 3E:2.2 : Scope of the Rules3E-7
      • [A] : Rebuttable Presumption3E-8
      • [B] : Scope Determined by Three Definitions3E-9
        • [B][1] : “Accountant”3E-9
        • [B][2] : “Audit Client”3E-10
        • [B][3] : “Audit and Professional Engagement Period”3E-13
      • [C] : When Independence Is Required3E-14
    • § 3E:2.3 : Discussion of Prohibited Non-Audit Services3E-15
      • [A] : Bookkeeping or Other Services Related to the Audit Client’s Accounting Records or Financial Statements3E-15
        • [A][1] : Text of Regulation S-X Rule 2-01(c)(4)(i)3E-15
        • [A][2] : Discussion3E-15
      • [B] : Financial Information Systems Design and Implementation3E-16
        • [B][1] : Text of Regulation S-X Rule 2-01(c)(4)(ii)3E-16
        • [B][2] : Discussion3E-16
        • [B][3] : Further Guidance: Examples3E-17
      • [C] : Appraisal or Valuation Services, Fairness Opinions or Contribution-in-Kind Reports3E-18
        • [C][1] : Text of Regulation S-X Rule 2-01(c)(4)(iii)3E-18
        • [C][2] : Discussion3E-18
      • [D] : Actuarial Services3E-19
        • [D][1] : Text of Regulation S-X Rule 2-01(c)(4)(iv)3E-19
        • [D][2] : Discussion3E-20
      • [E] : Internal Audit Outsourcing3E-20
        • [E][1] : Text of Regulation S-X Rule 2-01(c)(4)(v)3E-20
        • [E][2] : Discussion3E-20
      • [F] : Management Functions3E-21
        • [F][1] : Text of Regulation S-X Rule 2-01(c)(4)(vi)3E-21
        • [F][2] : Discussion3E-21
      • [G] : Human Resources3E-23
        • [G][1] : Text of Regulation S-X Rule 2-01(c)(4)(vii)3E-23
        • [G][2] : Discussion3E-23
      • [H] : Broker-Dealer, Investment Adviser or Investment Banking Services3E-24
        • [H][1] : Text of Regulation S-X Rule 2-01(c)(4)(viii)3E-24
        • [H][2] : Discussion3E-24
      • [I] : Legal Services3E-24
        • [I][1] : Text of Regulation S-X Rule 2-01(c)(4)(ix)3E-24
        • [I][2] : Discussion3E-24
      • [J] : Expert Services3E-25
        • [J][1] : Text of Regulation S-X Rule 2-01(c)(4)(x)3E-25
        • [J][2] : Discussion3E-26
    • § 3E:2.4 : Tax Services3E-28
      • [A] : SEC Rules3E-28
      • [B] : PCAOB Rules3E-29
        • [B][1] : Potentially Abusive Tax Transactions3E-29
          • [B][1][a] : Confidential Transactions3E-30
          • [B][1][b] : Aggressive Tax Position Transactions3E-31
        • [B][2] : Tax Services for Persons in Financial Reporting Oversight Roles3E-33
        • [B][3] : Permitted Tax Services3E-35
    • § 3E:2.5 : Application to Registered Investment Companies3E-36
  • § 3E:3 : Compensation of Audit Partners for Cross-Selling Non-Audit Services (Regulation S-X Rule 2-01(c)(8))3E-37
    • § 3E:3.1 : Overview3E-37
    • § 3E:3.2 : Text of Regulation S-X Rule 2-01(c)(8)3E-38
    • § 3E:3.3 : Covered Compensation3E-38
    • § 3E:3.4 : Partners Subject to the Rule3E-39
    • § 3E:3.5 : Registered Investment Companies3E-39
  • § 3E:4 : Other Independence-Impairing Relationships (Regulation S-X Rules 2-01(c)(1), 2-01(c)(3), 2-01(c)(5) and 2-01(d))3E-40
    • § 3E:4.1 : Financial Relationships3E-40
      • [A] : Investments in Audit Clients3E-41
        • [A][1] : Text of Regulation S-X Rule 2-01(c)(1)(i)3E-41
        • [A][2] : Discussion3E-42
          • [A][2][a] : Direct Investments3E-43
          • [A][2][b] : Greater Than 5% Ownership or Control3E-44
          • [A][2][c] : Trustee Positions3E-44
          • [A][2][d] : Material Indirect Investments3E-45
          • [A][2][e] : Intermediary Investors and Common Investees3E-45
      • [B] : Other Financial Interests3E-47
        • [B][1] : Text of Regulation S-X Rule 2-01(c)(1)(ii)3E-47
        • [B][2] : Discussion3E-48
      • [C] : Limited Exceptions to Prohibition on Investments and Other Financial Interests in Audit Clients3E-51
        • [C][1] : Text of Regulation S-X Rule 2-01(c)(1)(iii)3E-51
        • [C][2] : Discussion3E-52
      • [D] : Audit Client’s Investments and Financial Relationships with the Accounting Firm3E-53
        • [D][1] : Text of Regulation S-X Rule 2-01(c)(1)(iv)3E-53
        • [D][2] : Discussion3E-54
      • [E] : Limitation of Liability Provisions in Audit Engagement Letters3E-54
        • [E][1] : SEC Guidance on Indemnification by Audit Clients3E-55
        • [E][2] : Bank Regulatory Guidance on Audit Clients’ Limiting Liability of Auditors3E-55
        • [E][3] : AICPA Guidance Affecting Indemnification by Private Companies of Their Auditors3E-57
    • § 3E:4.2 : Business Relationships3E-59
      • [A] : Text of Regulation S-X Rule 2-01(c)(3)3E-59
      • [B] : Discussion3E-59
      • [C] : SEC Decision in E&Y–PeopleSoft Matter3E-60
        • [C][1] : Background3E-60
          • [C][1][a] : Facts3E-60
          • [C][1][b] : SEC Administrative Proceeding3E-61
        • [C][2] : Violations Found3E-62
        • [C][3] : Sanctions Against E&Y3E-64
      • [D] : SEC Order Against Deloitte & Touche LLP3E-65
    • § 3E:4.3 : Contingent Fees3E-65
      • [A] : Text of Regulation S-X Rule 2-01(c)(5)3E-65
      • [B] : Discussion3E-65
      • [C] : PCAOB Rule3E-68
    • § 3E:4.4 : Limited Exception Where Firm Has Quality Control System3E-69
      • [A] : Text of Regulation S-X Rule 2-01(d)3E-69
      • [B] : Discussion3E-70
  • § 3E:5 : Prohibited Employment Relationships (SOA Section 206, Regulation S-X Rules 2-01(c)(2)(i), 2-01(c)(2)(ii), 2-01(c)(2)(iii) and 2-01(c)(2)(iv))3E-71
    • § 3E:5.1 : Employing Former Auditors3E-72
      • [A] : Text of Requirement3E-72
        • [A][1] : SOA Section 2063E-72
        • [A][2] : Regulation S-X Rule 2-01(c)(2)(iii)3E-72
      • [B] : Affected Employment Positions3E-75
      • [C] : Audit Engagement Team3E-75
      • [D] : Cooling-Off Period3E-76
      • [E] : Application to Registered Investment Companies3E-77
      • [F] : Pre-SOA Employment Prohibitions3E-78
    • § 3E:5.2 : Employment at the Audit Client of an Accountant3E-79
      • [A] : Text of Regulation S-X Rule 2-01(c)(2)(i)3E-79
      • [B] : Discussion3E-79
    • § 3E:5.3 : Employment at the Audit Client of Certain Relatives of an Accountant3E-80
      • [A] : Text of Regulation S-X Rule 2-01(c)(2)(ii)3E-80
      • [B] : Discussion3E-80
    • § 3E:5.4 : Employment at Accounting Firm of Former Employee of the Audit Client3E-81
      • [A] : Text of Regulation S-X Rule 2-01(c)(2)(iv)3E-81
      • [B] : Discussion3E-81
  • § 3E:6 : Close Personal Relationships—An Application of General Independence Principles3E-81
    • § 3E:6.1 : Text of Regulation S-X Rule 2-01(b)3E-82
    • § 3E:6.2 : Discussion3E-82
Chapter 3F: Pre-Approval of Permitted Services
  • § 3F:1 : Overview3F-1
  • § 3F:2 : Text of Requirements3F-1
    • § 3F:2.1 : Text of SOA Section 2023F-1
    • § 3F:2.2 : Text of Regulation S-X Rule 2-01(c)(7)3F-3
  • § 3F:3 : Pre-Approval Requirement3F-4
    • § 3F:3.1 : Two Pre-Approval Methods3F-4
    • § 3F:3.2 : Limited De Minimis Exception3F-9
    • § 3F:3.3 : Application to Issuers and Their Subsidiaries3F-9
      • [A] : Scope of the Rule3F-9
        • [A][1] : Corporate “Families” with Multiple Issuers3F-11
  • § 3F:4 : Audit Versus Non-Audit Services3F-11
  • § 3F:5 : Application to Non-U.S. Issuers3F-12
  • § 3F:6 : Application to Registered Investment Companies3F-13
  • § 3F:7 : Auditor Involvement in Pre-Approval Process—PCAOB Rule3F-14
Chapter 3G: Audit Partner Rotation
  • § 3G:1 : Overview3G-1
  • § 3G:2 : Text of Requirement3G-2
    • § 3G:2.1 : Text of SOA Section 2033G-2
    • § 3G:2.2 : Text of Regulation S-X Rule 2-01(c)(6)3G-2
  • § 3G:3 : Partners Required to Rotate3G-4
    • § 3G:3.1 : “Lead” and “Concurring or Reviewing” Partners3G-4
    • § 3G:3.2 : Audit Partners3G-4
  • § 3G:4 : Rotation and Time-Out Period3G-6
  • § 3G:5 : Application to Registered Investment Companies3G-8
  • § 3G:6 : Companies That Have Recently Become “Issuers”3G-9
  • § 3G:7 : Concept Release on Auditor Independence and Audit Firm Rotation3G-9
Chapter 3H: Retention of Audit Workpapers
  • § 3H:1 : Overview3H-1
  • § 3H:2 : Text of Requirement3H-2
    • § 3H:2.1 : Text of SOA Section 802(a)3H-2
    • § 3H:2.2 : Text of Regulation S-X Rule 2-063H-3
  • § 3H:3 : Description of SEC Rule3H-4
    • § 3H:3.1 : Documents to Be Retained3H-4
      • [A] : Substantive Materials3H-4
      • [B] : “Workpapers” Defined3H-5
    • § 3H:3.2 : Documents That Are Inconsistent with the Auditor’s Final Conclusions3H-6
    • § 3H:3.3 : Time Period for Which Documents Must Be Retained3H-8
    • § 3H:3.4 : Items for Consideration by the PCAOB3H-8
    • § 3H:3.5 : Accountants Subject to the Rule3H-9
      • [A] : Covered Issuers3H-9
      • [B] : Covered Accountants3H-9
      • [C] : Non-U.S. SEC-Reporting Companies and Accountants3H-10
    • § 3H:3.6 : Criminal Penalties for Violations of the Rule3H-10
Chapter 3I: Improper Influence on Conduct of Audits
  • § 3I:1 : Overview3I-1
  • § 3I:2 : Text of Requirement3I-1
    • § 3I:2.1 : Text of SOA Section 3033I-1
    • § 3I:2.2 : Text of Rule 13b2-23I-2
  • § 3I:3 : Description3I-4
    • § 3I:3.1 : Activities That Could Give Rise to a Violation of the Rule3I-5
    • § 3I:3.2 : Individuals Covered by the Rule3I-7
    • § 3I:3.3 : Period Covered by the Rule3I-8
Chapter 3J: Disclosure of Auditor Fees and Pre-Approval of Services
  • § 3J:1 : Overview3J-1
  • § 3J:2 : Text of Schedule 14A Item 9(e)3J-1
  • § 3J:3 : Disclosure of Professional Fees3J-3
    • § 3J:3.1 : Audit Fees3J-4
    • § 3J:3.2 : Audit-Related Fees3J-5
    • § 3J:3.3 : Tax Fees3J-6
    • § 3J:3.4 : All Other Fees3J-6
  • § 3J:4 : Disclosure of Pre-Approval Policies and Procedures3J-7
  • § 3J:5 : Location of Disclosure3J-7
  • § 3J:6 : Application to Registered Investment Companies3J-8
Chapter 4A: Compensation Committee Responsibilities and Authority
  • § 4A:1 : Overview4A-2
  • § 4A:2 : Text of Rules Regarding Compensation Committee Responsibilities and Authority4A-2
    • § 4A:2.1 : Text of NYSE Rules Relating to Compensation Committee Responsibilities4A-2
    • § 4A:2.2 : Text of Nasdaq Rules Relating to Compensation Committee Responsibilities4A-5
    • § 4A:2.3 : Text of Rule 10C-1 Under the Exchange Act4A-10
  • § 4A:3 : Sample Compensation Committee Charter for Listed U.S. Companies4A-14
    • § 4A:3.1 : NYSE-Listed U.S. Companies4A-14
    • § 4A:3.2 : Nasdaq-Listed U.S. Companies4A-18
  • § 4A:4 : NYSE Rules Relating to Compensation Committee Responsibilities4A-23
    • § 4A:4.1 : Entities Subject to the Rules4A-24
    • § 4A:4.2 : Timing of Effectiveness and Phase-Ins4A-24
    • § 4A:4.3 : Application to Non-U.S. Issuers4A-25
    • § 4A:4.4 : Charter and Responsibilities4A-25
    • § 4A:4.5 : Compensation Committee Advisers4A-26
    • § 4A:4.6 : Delegation4A-26
  • § 4A:5 : Nasdaq Listing Requirements4A-27
    • § 4A:5.1 : Entities Subject to the Rules4A-28
    • § 4A:5.2 : Timing of Effectiveness and Phase-Ins4A-28
    • § 4A:5.3 : Application to Non-U.S. Issuers4A-29
    • § 4A:5.4 : Charter and Responsibilities4A-29
    • § 4A:5.5 : Compensation Committee Advisers4A-30
    • § 4A:5.6 : Delegation4A-34
Chapter 4B: Compensation Committee Composition
  • § 4B:1 : Overview4B-2
  • § 4B:2 : Text of Rules Regarding Compensation Committee Composition4B-2
    • § 4B:2.1 : Text of NYSE Rules Relating to Compensation Committee Composition4B-3
    • § 4B:2.2 : Text of Nasdaq Rules Relating to Compensation Committee Composition4B-5
    • § 4B:2.3 : Text of Rule 10C-1 Under the Exchange Act4B-9
    • § 4B:2.4 : Text of Rule 16b-3 Under the Exchange Act4B-13
    • § 4B:2.5 : Text of Section 16(b) of the Exchange Act4B-14
    • § 4B:2.6 : Text of Treasury Regulations Section 1.162-27(e) Under the Internal Revenue Code4B-15
    • § 4B:2.7 : Text of Section 162(m) of the Internal Revenue Code4B-20
  • § 4B:3 : NYSE Rules Relating to Compensation Committee Composition4B-28
    • § 4B:3.1 : Entities Subject to the Rules4B-28
    • § 4B:3.2 : Timing of Effectiveness and Phase-Ins4B-29
    • § 4B:3.3 : Application to Non-U.S. Issuers4B-30
    • § 4B:3.4 : Additional Independence Requirements4B-30
    • § 4B:3.5 : Opportunity to Cure4B-31
  • § 4B:4 : Nasdaq Listing Requirements4B-31
    • § 4B:4.1 : Entities Subject to the Rules4B-31
    • § 4B:4.2 : Timing of Effectiveness and Phase-Ins4B-31
    • § 4B:4.3 : Application to Non-U.S. Issuers4B-33
    • § 4B:4.4 : Additional Independence Requirements4B-33
    • § 4B:4.5 : Opportunity to Cure4B-35
  • § 4B:5 : Standards for Non-Employee Director Under Section 16 of the Exchange Act4B-35
  • § 4B:6 : Standards for Outside Directors Under the Internal Revenue Code4B-38
    • § 4B:6.1 : Requirements to Be an Outside Director4B-39
      • [A] : Former Officer4B-39
      • [B] : Remuneration Received from the Company4B-40
Chapter 4C: Compensation Committee Disclosure Requirements
  • § 4C:1 : Overview4C-1
  • § 4C:2 : Text of Rules Regarding Compensation Committee Disclosure4C-2
    • § 4C:2.1 : Text of Item 407(e) of Regulation S-K4C-2
    • § 4C:2.2 : Text of Items 7 and 8 of Schedule 14A4C-7
  • § 4C:3 : Compensation Committee and Compensation Disclosure Requirements4C-9
    • § 4C:3.1 : Identification4C-9
    • § 4C:3.2 : Charter4C-9
    • § 4C:3.3 : Processes and Procedures; Scope and Authority4C-10
    • § 4C:3.4 : Executive Officer Involvement4C-10
    • § 4C:3.5 : Compensation Committee Interlock4C-10
    • § 4C:3.6 : Compensation Committee Report4C-10
    • § 4C:3.7 : Compensation Consultant Disclosure4C-11
Chapter 4D: Say-on-Pay and Say-When-on-Pay
  • § 4D:1 : Overview4D-2
  • § 4D:2 : SEC Rules and Staff Guidance Regarding Say-on-Pay and Say-When-on-Pay; Summary of Voting Policies4D-2
    • § 4D:2.1 : Rule 14a-21 Under the Exchange Act4D-3
    • § 4D:2.2 : SEC Compliance and Disclosure Interpretations4D-5
    • § 4D:2.3 : Section 14A of the Securities Exchange Act4D-6
    • § 4D:2.4 : ISS Say-on-Pay Voting Policy (Concise Summary)4D-7
    • § 4D:2.5 : Glass Lewis Say-on-Pay Voting Policy4D-11
    • § 4D:2.6 : Selected Investor Voting Policies4D-16
  • § 4D:3 : Discussion of Say-on-Pay Rules4D-19
  • § 4D:4 : Discussion of Say-on-Pay Votes and ISS/Glass Lewis Say-on-Pay Evaluation4D-20
    • § 4D:4.1 : Overall ISS Approach on Say-on-Pay Evaluation4D-22
    • § 4D:4.2 : ISS Pay-for-Performance Analysis4D-23
      • [A] : Components of Quantitative Analysis4D-23
      • [B] : 2017 Results of ISS Quantitative Analysis4D-24
      • [C] : Potential Problems with Quantitative Analysis4D-25
        • [C][1] : Determination of Total CEO Pay4D-26
        • [C][2] : Use of TSR over Fixed Periods4D-27
        • [C][3] : Peer Group Construction4D-27
      • [D] : ISS Qualitative Analysis4D-28
      • [E] : New ISS Financial Metrics for Qualitative Consideration4D-30
    • § 4D:4.3 : ISS Non-Performance-Related Factors4D-31
    • § 4D:4.4 : Glass Lewis Say-on-Pay Analysis4D-32
    • § 4D:4.5 : Company Rebuttals to ISS and Glass Lewis Say-on-Pay Recommendations4D-33
    • § 4D:4.6 : Analysis of Historic Responses to Lost Say-on-Pay Votes4D-33
  • § 4D:5 : Say-When-on-Pay4D-35
  • § 4D:6 : Emerging Growth Companies Exempt4D-37
Chapter 4E: Say-on-Golden Parachutes
  • § 4E:1 : Overview4E-1
  • § 4E:2 : SEC Rules and Staff Guidance Regarding Say-on-Golden Parachutes; Summary of Voting Policies4E-2
    • § 4E:2.1 : Item 402(t) of Regulation S-K4E-2
    • § 4E:2.2 : SEC Compliance and Disclosure Interpretation4E-7
    • § 4E:2.3 : Rule 14a-21 Under the Exchange Act4E-8
    • § 4E:2.4 : Section 14A of the Securities Exchange Act4E-9
    • § 4E:2.5 : ISS Voting Policy (Summary)4E-10
    • § 4E:2.6 : Glass Lewis Voting Policy4E-11
    • § 4E:2.7 : Voting Policies of Selected Institutional Investors4E-11
  • § 4E:3 : Golden Parachute Disclosure4E-13
    • § 4E:3.1 : Applicable Share Price4E-15
    • § 4E:3.2 : Disclosure in Other Documents4E-15
  • § 4E:4 : Say-on-Golden Parachute Vote4E-16
  • § 4E:5 : Discussion of Say-on-Golden Parachute Experience4E-17
    • § 4E:5.1 : Summary of Voting Results (2011–2016)4E-17
    • § 4E:5.2 : Impact of Compensation Enhancements (2011–2014)4E-18
  • § 4E:6 : Emerging Growth Companies Exempt4E-20
Chapter 4F: CEO Pay Ratio
  • § 4F:1 : Overview4F-1
  • § 4F:2 : Text of Requirements Regarding CEO Pay Ratio Disclosure4F-2
    • § 4F:2.1 : Text of Item 402(u) of Regulation S-K4F-2
    • § 4F:2.2 : Text of Section 953(b) of the Dodd-Frank Act4F-9
    • § 4F:2.3 : SEC Staff Commentary4F-10
  • § 4F:3 : Discussion of the Rule4F-13
    • § 4F:3.1 : Background4F-13
    • § 4F:3.2 : Timing and Coverage4F-14
    • § 4F:3.3 : Covered Employees4F-15
    • § 4F:3.4 : Identifying the Median4F-17
    • § 4F:3.5 : Determination of Total Compensation4F-19
    • § 4F:3.6 : Multiple CEOs4F-20
    • § 4F:3.7 : Pay Ratio Presentation4F-20
    • § 4F:3.8 : Disclosure of Methodology, Assumptions and Estimates4F-20
    • § 4F:3.9 : Other Matters4F-21
Chapter 4G: Clawback Policies
  • § 4G:1 : Overview4G-1
  • § 4G:2 : Text of Requirements Regarding Clawback Policies4G-1
    • § 4G:2.1 : Text of Proposed Rule 10D-1 and Item 402(w)4G-1
    • § 4G:2.2 : Text of Item 402(b) of Regulation S-K4G-9
    • § 4G:2.3 : Text of Section 304 of SOX4G-9
    • § 4G:2.4 : Text of Section 954 of the Dodd-Frank Act4G-10
  • § 4G:3 : Examples of Clawback Policies4G-10
    • § 4G:3.1 : IBM4G-10
    • § 4G:3.2 : Johnson & Johnson4G-11
    • § 4G:3.3 : JPMorgan Chase & Co.4G-14
    • § 4G:3.4 : Microsoft4G-14
  • § 4G:4 : Discussion of Proposed Rule 10D-1 and Item 402(w)4G-15
    • § 4G:4.1 : Background4G-15
    • § 4G:4.2 : Required Clawback of Incentive-Based Compensation4G-16
      • [A] : Executives Subject to Mandatory Clawback4G-16
      • [B] : Incentive-Based Compensation Covered4G-17
      • [C] : Restatement Triggers4G-18
      • [D] : Three Fiscal Year Clawback Period4G-19
      • [E] : Determination of Excess Compensation4G-20
      • [F] : Exceptions to the Clawback Obligation4G-22
      • [G] : Manner of Recovery4G-22
      • [H] : Prohibition on Indemnification or Issuer-Paid Insurance4G-23
    • § 4G:4.3 : Disclosure Requirements4G-23
    • § 4G:4.4 : Issuers Exempted4G-24
    • § 4G:4.5 : Effectiveness4G-25
  • § 4G:5 : Clawback Implementation and Disclosure4G-25
    • § 4G:5.1 : Background4G-25
    • § 4G:5.2 : Statutory Clawbacks4G-26
    • § 4G:5.3 : Adopting a Clawback Policy4G-26
    • § 4G:5.4 : Accounting Considerations4G-28
  • § 4G:6 : Discussion of SOX Section 3044G-28
    • § 4G:6.1 : No Private Right of Action4G-28
    • § 4G:6.2 : No Indemnification for Section 304 Liability4G-29
    • § 4G:6.3 : Scope4G-30
Chapter 4H: Compensation and Risk
  • § 4H:1 : Overview4H-2
  • § 4H:2 : Text of Rules Regarding Disclosure of Compensation-Related Risk4H-2
    • § 4H:2.1 : Text of Item 402(s) of Regulation S-K4H-2
    • § 4H:2.2 : Text of Item 407(e) of Regulation S-K4H-4
    • § 4H:2.3 : Text of Guidance on Sound Incentive Compensation Policies (75 Fed. Reg. 36,395)4H-4
    • § 4H:2.4 : Text of Proposed Incentive Compensation Regulation (17 C.F.R. Part 303)4H-11
  • § 4H:3 : Disclosure of Compensation-Related Risk4H-19
    • § 4H:3.1 : Substance of Additional Risk Disclosure4H-19
    • § 4H:3.2 : Location of Additional Disclosure4H-20
    • § 4H:3.3 : Relationship to ISS Voting Policies on Compensation and Governance Practices4H-21
  • § 4H:4 : Federal Banking Agencies Incentive Compensation Guidance4H-21
    • § 4H:4.1 : Balanced Risk-Taking Incentive Compensation Arrangements4H-22
    • § 4H:4.2 : Compatibility with Effective Controls and Risk Management4H-24
    • § 4H:4.3 : Effective Corporate Governance4H-24
  • § 4H:5 : Proposed Joint Rule for Incentive Compensation Guidance Under Section 956 of the Dodd-Frank Act4H-25
    • § 4H:5.1 : Coverage4H-25
    • § 4H:5.2 : Requirements on All Covered Institutions4H-27
    • § 4H:5.3 : Mandatory Deferral Requirements for Level 1 and Level 2 Covered Institutions4H-29
    • § 4H:5.4 : Forfeiture and Downward Adjustment and Clawback Requirements for Level 1 and Level 2 Covered Institutions4H-30
    • § 4H:5.5 : Additional Prohibitions for Level 1 and Level 2 Covered Institutions4H-31
    • § 4H:5.6 : Risk Management and Controls Requirements for Level 1 and Level 2 Covered Institutions4H-32
    • § 4H:5.7 : Governance Requirements for Level 1 and Level 2 Covered Institutions4H-33
Chapter 4I: Hedging and Pledging
  • § 4I:1 : Overview4I-1
  • § 4I:2 : Text of Requirements Regarding Hedging and Pledging Policies4I-2
    • § 4I:2.1 : Requirements Relating to Hedging Policies4I-2
      • [A] : Text of Proposed Amendment to Item 407 of Regulation S-K4I-2
      • [B] : Text of Item 402(b) of Regulation S-K4I-3
      • [C] : Text Section 955 of the Dodd-Frank Act4I-3
    • § 4I:2.2 : Requirements Relating to Pledging4I-4
    • § 4I:2.3 : Proxy Advisory Firm Voting Policies4I-4
      • [A] : ISS Governance Failures Voting Policy (Concise)4I-4
      • [B] : Glass-Lewis Guidelines 2015 Proxy Season4I-5
  • § 4I:3 : Discussion of Proposed Rule Requiring Disclosure of Hedging Policies4I-7
    • § 4I:3.1 : Background4I-7
    • § 4I:3.2 : Covered Hedging Transactions4I-7
    • § 4I:3.3 : Covered Securities4I-8
    • § 4I:3.4 : Covered Companies4I-8
    • § 4I:3.5 : Disclosure Location and Timing4I-8
    • § 4I:3.6 : Concerns Raised by Commissioners4I-9
  • § 4I:4 : Discussion of Requirements Related to Disclosure of Pledging4I-9
  • § 4I:5 : Discussion of Proxy Advisory Firm Hedging and Pledging Voting Policies4I-10
Chapter 4J: Named Executive Officers
  • § 4J:1 : Overview4J-1
  • § 4J:2 : Text of Requirements and Interpretations Regarding Compensation Disclosure of Named Executive Officers4J-1
    • § 4J:2.1 : Text of Item 402(a)(3)–(4) of Regulation S-K4J-1
    • § 4J:2.2 : SEC Staff Commentary4J-2
  • § 4J:3 : Discussion of Rule4J-5
  • § 4J:4 : Interpretive Guidance4J-6
Chapter 4K: Compensation Discussion and Analysis
  • § 4K:1 : Overview4K-1
  • § 4K:2 : Text of Requirements and Interpretations Regarding Compensation Discussion and Analysis4K-2
    • § 4K:2.1 : Text of Item 402(b) of Regulation S-K4K-2
    • § 4K:2.2 : SEC Staff Commentary4K-5
    • § 4K:2.3 : SEC Staff Unofficial Commentary4K-10
  • § 4K:3 : Discussion of Rule4K-13
    • § 4K:3.1 : General4K-13
    • § 4K:3.2 : Option Grant Practices4K-15
    • § 4K:3.3 : Disclosure of Confidential Commercial or Business Information4K-16
    • § 4K:3.4 : Compensation Risk Disclosure4K-17
    • § 4K:3.5 : Clawback Policies4K-17
    • § 4K:3.6 : General Disclosure and Liability Provisions4K-17
  • § 4K:4 : Interpretive Guidance4K-18
Chapter 4L: Summary Compensation Table
  • § 4L:1 : Overview4L-2
  • § 4L:2 : Text of Requirements and InterpretationsRegarding the Summary Compensation Table4L-2
    • § 4L:2.1 : Text of Item 402(c) of Regulation S-K4L-2
    • § 4L:2.2 : SEC Staff Commentary4L-10
      • [A] : [Years Presented]4L-10
      • [B] : [Effects of M&A and Spin-Off Transactions; Allocations Among Affiliates]4L-12
      • [C] : [Bonus & Non-Equity Incentive—Columns (D) & (G)]4L-14
      • [D] : [Stock Awards & Option Awards—Columns (E) & (F)]4L-17
      • [E] : [Pension Value & NQDC—Column (H)]4L-23
      • [F] : [All Other—Column (I)]4L-25
    • § 4L:2.3 : SEC Staff Unofficial Commentary4L-28
      • [A] : [Years Presented]4L-28
      • [B] : [Effects of M&A and Spin-Off Transactions;Allocations Among Affiliates]4L-29
      • [C] : [Bonus & Non-Equity Incentive—Columns (D) & (G)]4L-30
      • [D] : [Stock Awards & Option Awards—Columns (E) & (F)]4L-32
      • [E] : [Pension Value & NQDC—Column (H)]4L-43
      • [F] : [All Other—Column (I)]4L-44
  • § 4L:3 : Total Compensation4L-46
  • § 4L:4 : Salary and Bonus4L-47
    • § 4L:4.1 : Discussion of Rule4L-47
    • § 4L:4.2 : Interpretive Guidance4L-47
  • § 4L:5 : Stock Awards and Option Awards4L-47
    • § 4L:5.1 : Discussion of 2009 Revised Rule4L-47
    • § 4L:5.2 : Interpretive Guidance Under 2009 Revised Rule4L-48
    • § 4L:5.3 : Discussion of 2006 Rule4L-51
  • § 4L:6 : Non-Equity Incentive Compensation4L-52
  • § 4L:7 : Pension Benefits and Deferred Compensation Earnings4L-53
    • § 4L:7.1 : Discussion of Rule4L-53
    • § 4L:7.2 : Interpretive Guidance4L-53
  • § 4L:8 : All Other Compensation4L-54
    • § 4L:8.1 : Discussion of Rule4L-54
    • § 4L:8.2 : Interpretive Guidance4L-55
Chapter 4M: Grants of Plan-Based Awards Table
  • § 4M:1 : Overview4M-1
  • § 4M:2 : Text of Requirements and Interpretations Regarding the Grant of Plan-Based Awards Table4M-1
    • § 4M:2.1 : Text of Item 402(d) of Regulation S-K4M-1
    • § 4M:2.2 : SEC Staff Commentary4M-5
    • § 4M:2.3 : SEC Staff Unofficial Commentary4M-10
  • § 4M:3 : Discussion of Rule4M-11
  • § 4M:4 : Interpretive Guidance4M-12
Chapter 4N: Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
  • § 4N:1 : Overview4N-1
  • § 4N:2 : Text of Requirements Regarding Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table4N-2
    • § 4N:2.1 : Text of Item 402(e) of Regulation S-K4N-2
  • § 4N:3 : Discussion of Rule4N-3
Chapter 4O: Tables Relating to Equity Holdings and Value Realization
  • § 4O:1 : Overview4O-2
  • § 4O:2 : Text of Requirements and Interpretations Regarding Equity Holdings & Value Realization4O-2
    • § 4O:2.1 : Text of Item 402(f) of Regulation S-K—Outstanding Equity Awards at Fiscal Year-End4O-2
    • § 4O:2.2 : SEC Staff Commentary4O-5
    • § 4O:2.3 : SEC Staff Unofficial Commentary4O-8
    • § 4O:2.4 : Text of Item 402(g) of Regulation S-K—Option Exercises and Stock Vested Table4O-9
    • § 4O:2.5 : SEC Staff Commentary4O-11
    • § 4O:2.6 : SEC Staff Unofficial Commentary4O-12
  • § 4O:3 : Outstanding Equity Awards at Fiscal Year-End Table4O-16
    • § 4O:3.1 : Discussion of Rule4O-16
    • § 4O:3.2 : Interpretive Guidance4O-17
  • § 4O:4 : Option Exercises and Stock Vested Table4O-17
    • § 4O:4.1 : Discussion of Rule4O-17
    • § 4O:4.2 : Interpretive Guidance4O-17
Chapter 4P: Tables and Disclosure Relating to Post-Employment Compensation
  • § 4P:1 : Overview4P-2
  • § 4P:2 : Text of Requirements and Interpretations for Tables and Disclosures Relating to Post-Employment Compensation4P-2
    • § 4P:2.1 : Text of Item 402(h) of Regulation S-K—Pension Benefits Table4P-2
    • § 4P:2.2 : SEC Staff Commentary4P-5
    • § 4P:2.3 : Text of Item 402(i) of Regulation S-K—Nonqualified Defined Contribution and Other Nonqualified Deferred Compensation Plans4P-7
    • § 4P:2.4 : SEC Staff Commentary4P-9
    • § 4P:2.5 : SEC Staff Unofficial Commentary4P-10
    • § 4P:2.6 : Text of Item 402(j) of Regulation S-K—Disclosure of Potential Payments Upon Termination or Change-in-Control4P-12
    • § 4P:2.7 : SEC Staff Commentary4P-14
    • § 4P:2.8 : SEC Staff Unofficial Commentary4P-17
  • § 4P:3 : Pension Benefits Table4P-18
    • § 4P:3.1 : Discussion of Rule4P-18
    • § 4P:3.2 : Interpretive Guidance4P-18
  • § 4P:4 : Nonqualified Deferred Compensation Table4P-19
    • § 4P:4.1 : Discussion of Rule4P-19
    • § 4P:4.2 : Interpretive Guidance4P-19
  • § 4P:5 : Disclosure of Potential Payments Upon Termination or Change-in-Control4P-20
    • § 4P:5.1 : Discussion of Rule4P-20
    • § 4P:5.2 : Interpretive Guidance4P-21
Chapter 4Q: Director Compensation Table
  • § 4Q:1 : Overview4Q-1
  • § 4Q:2 : Text of Requirements and Interpretations for Tables and Disclosures Relating to Director Compensation4Q-2
    • § 4Q:2.1 : Text of Item 402(k) of Regulation S-K—Director Compensation Table4Q-2
    • § 4Q:2.2 : SEC Staff Commentary4Q-8
    • § 4Q:2.3 : SEC Staff Unofficial Commentary4Q-10
  • § 4Q:3 : Discussion of Rule4Q-13
  • § 4Q:4 : 2009 Revisions to the Director Compensation Table4Q-14
  • § 4Q:5 : Nasdaq Rule on Third-Party Director Compensation4Q-14
    • § 4Q:5.1 : Text of Nasdaq Rule 5250(b)(3) and IM 5250-24Q-14
    • § 4Q:5.2 : Background4Q-17
    • § 4Q:5.3 : Disclosure Requirement4Q-18
Chapter 4R: Pay-Versus-Performance Disclosure
  • § 4R:1 : Overview4R-1
  • § 4R:2 : Text of Requirements Regarding CEO Pay Ratio Disclosure4R-2
    • § 4R:2.1 : Proposed Item 402(u) of Regulation S-K4R-2
    • § 4R:2.2 : Text of Section 953(a) of the Dodd-Frank Act4R-6
  • § 4R:3 : Discussion of the Proposed Rule4R-7
    • § 4R:3.1 : Background4R-7
    • § 4R:3.2 : New Required Table and Narrative/Graphic Disclosure4R-7
    • § 4R:3.3 : Transition Periods4R-8
    • § 4R:3.4 : Executives Covered4R-8
    • § 4R:3.5 : Determination of “Actual” Pay4R-9
    • § 4R:3.6 : Exempted Companies4R-10
    • § 4R:3.7 : Say-on-Pay Implications and Form Requirements4R-10
    • § 4R:3.8 : XBRL Requirement4R-10
    • § 4R:3.9 : Concerns of Dissenting Commissioners4R-10
Chapter 5A: Management’s Discussion and Analysis
  • § 5A:1 : Overview5A-4
  • § 5A:2 : General MD&A Requirements and Objectives5A-5
    • § 5A:2.1 : Text of Requirements—Regulation S-K Item 3035A-5
    • § 5A:2.2 : SEC’s Stated Objectives of MD&A Disclosure5A-11
    • § 5A:2.3 : MD&A Requirements and SEC Interpretative Guidance5A-13
  • § 5A:3 : Presentation, Focus and Content of MD&A5A-15
    • § 5A:3.1 : Overall Presentation of MD&A5A-15
      • [A] : Executive-Level Overview5A-15
      • [B] : Layered Approach5A-16
      • [C] : Tabular Presentation5A-17
      • [D] : Use of Headings5A-17
      • [E] : Avoidance of Duplicative Disclosure5A-17
    • § 5A:3.2 : Focus and Content of MD&A5A-17
      • [A] : Focus on Key Indicators of Financial Condition and Operating Performance5A-18
      • [B] : Focus on Materiality5A-19
        • [B][1] : Eliminate Immaterial and Duplicative Disclosure5A-19
        • [B][2] : Quarterly Reports5A-20
      • [C] : Focus on Material Trends and Uncertainties5A-20
      • [D] : Focus on Analysis5A-21
    • § 5A:3.3 : Additional General MD&A Guidance5A-23
      • [A] : Discuss Each Operating Segment5A-23
      • [B] : Expand Discussion Beyond GAAP5A-23
      • [C] : Be Consistent with Other Statements5A-24
      • [D] : Disclose Discrete Contributions to Results5A-25
      • [E] : Consider Need to Disclose Offsetting Items5A-26
      • [F] : Consider Disclosing the Impact of Future Accounting Standard Changes5A-26
      • [G] : Increase Working Group Discussion5A-27
      • [H] : Audit Committee Review5A-27
      • [I] : MD&A “Audit” Report5A-28
      • [J] : Interim MD&A5A-28
  • § 5A:4 : Liquidity and Capital Resources5A-29
    • § 5A:4.1 : Cash Requirements5A-30
    • § 5A:4.2 : Sources and Uses of Cash5A-31
      • [A] : Operating Cash Flows5A-32
      • [B] : Financing Cash Flows5A-33
    • § 5A:4.3 : Debt Instruments, Guarantees and Related Covenants5A-34
      • [A] : Breach of Covenants5A-34
      • [B] : Impact of Covenants on Ability to Obtain Additional Financing5A-35
    • § 5A:4.4 : Cash Management5A-35
  • § 5A:5 : Off-Balance Sheet Disclosures5A-36
    • § 5A:5.1 : Overview5A-36
    • § 5A:5.2 : Text of Requirements5A-38
      • [A] : Text of SOA Section 401(a) (Adding Exchange Act Section 13(j))5A-38
      • [B] : Regulation S-K Item 303(a)(4) and (5)5A-38
    • § 5A:5.3 : Off-Balance Sheet Arrangements Covered5A-42
      • [A] : Guarantee Contracts5A-43
        • [A][1] : Included Guarantees5A-43
        • [A][2] : Excluded Items5A-44
      • [B] : Retained or Contingent Interests5A-45
      • [C] : Derivative Instruments Accounted for As Equity5A-46
      • [D] : Variable Interests5A-47
    • § 5A:5.4 : Applicable Disclosure Threshold5A-47
    • § 5A:5.5 : Content of Required Disclosure5A-48
    • § 5A:5.6 : Additional Principles-Based Disclosure Requirement5A-50
    • § 5A:5.7 : Limitation to Disclosure of Binding Contractual Arrangements5A-51
    • § 5A:5.8 : Organization and Presentation of Disclosure5A-51
      • [A] : Aggregate Approach5A-51
      • [B] : Cross-Referencing to the Financial Statements5A-52
      • [C] : Checklist for Compliance5A-53
    • § 5A:5.9 : Table of Aggregate Contractual Obligations5A-53
    • § 5A:5.10 : Safe Harbor Protection for Forward-Looking Information Relating to Off-Balance Sheet Arrangements5A-56
    • § 5A:5.11 : Application of the Rules to Non-U.S. Companies5A-57
    • § 5A:5.12 : Off-Balance Sheet Arrangements5A-58
  • § 5A:6 : Critical Accounting Estimates5A-59
    • § 5A:6.1 : 2003 SEC Guidance Regarding Critical Accounting Estimates5A-60
      • [A] : Estimates That Must Be Disclosed5A-60
      • [B] : Supplement Financial Statement Notes5A-60
      • [C] : Related Factors5A-61
      • [D] : Sensitivity Analysis5A-61
    • § 5A:6.2 : Accounting and Prior SEC Guidance on Critical Accounting Policies5A-61
      • [A] : APB Opinion No. 22, Disclosure of Accounting Policies (1972)5A-62
      • [B] : AICPA SOP 94-6, Disclosure of Significant Risks and Uncertainties (1994)5A-62
      • [C] : SAS No. 61, Communication with Audit Committees (As Amended by SAS No. 90 in 1999)5A-63
      • [D] : SEC’s Cautionary Advice (December 2001)5A-64
      • [E] : Speech by SEC Chief Accountant (January 2002)5A-65
      • [F] : SEC Comments on Fortune 500 Critical Accounting Policy Disclosure5A-65
      • [G] : SOA Section 2045A-66
    • § 5A:6.3 : 2002 Proposed Rules on Critical Accounting Policies5A-67
      • [A] : Overview5A-67
      • [B] : Policy Rationale and Scope of Proposals5A-68
      • [C] : Critical Accounting Estimates5A-68
        • [C][1] : Accounting Estimates Covered5A-70
        • [C][2] : Identification and Description of the Accounting Estimate5A-71
        • [C][3] : Impact of the Critical Accounting Estimate on Financial Statements5A-72
        • [C][4] : Quantitative Disclosures5A-72
          • [C][4][a] : Quantitative Disclosure to Demonstrate Sensitivity5A-73
          • [C][4][b] : Quantitative and Qualitative Disclosures Covering Past Changes in the Estimate5A-73
        • [C][5] : Senior Management’s Discussions with the Audit Committee5A-74
      • [D] : Initial Adoption of Accounting Policies5A-75
        • [D][1] : Proposed MD&A Disclosure5A-75
        • [D][2] : Disclosing Changes to Existing Policies5A-76
      • [E] : Relationship of 2003 Interpretative Guidance to Rule Proposal5A-77
  • § 5A:7 : MD&A Discussion of Fair Value Accounting5A-78
    • § 5A:7.1 : Background5A-78
    • § 5A:7.2 : Fair Value Accounting Standards5A-79
      • [A] : Standards Requiring or Permitting Fair Value Accounting5A-79
      • [B] : SFAS No. 157, Fair Value Measurement5A-80
      • [C] : FASB Staff Position No. FAS 157-35A-81
      • [D] : FASB Staff Position No. FAS 157-45A-82
    • § 5A:7.3 : Guidance on Disclosure of Fair Value Measurements in the MD&A—The “Dear CFO” Letters5A-83
      • [A] : The March 2008 Letter5A-84
      • [B] : The September 2008 Letter5A-86
  • § 5A:8 : Miscellaneous MD&A Topics5A-87
    • § 5A:8.1 : Comments Given in SEC’s 2002 Fortune 500 Review5A-88
      • [A] : Revenue Recognition5A-88
      • [B] : Restructuring Charges5A-90
      • [C] : Impairment Charges5A-90
        • [C][1] : Long-Lived Assets5A-90
        • [C][2] : Securities Held for Investment5A-91
        • [C][3] : Goodwill and Other Intangible Assets5A-92
      • [D] : Pension Plans5A-92
      • [E] : Segment Reporting5A-94
      • [F] : Environmental and Product Liability5A-94
    • § 5A:8.2 : Energy and Other OTC Commodity Trading5A-94
    • § 5A:8.3 : Transactions with Non-Independent Parties5A-95
    • § 5A:8.4 : Oil and Gas Disclosures5A-96
    • § 5A:8.5 : Loss Contingencies and Reserves5A-98
    • § 5A:8.6 : Guidance Focused on Financial Institutions5A-99
      • [A] : Allowance for Loan Losses5A-99
      • [B] : Mortgage- and Foreclosure-Related Activities or Exposures5A-100
      • [C] : Sovereign Debt Exposure5A-101
      • [D] : Guidance for Smaller Financial Institutions5A-101
    • § 5A:8.7 : Cybersecurity Issues5A-102
    • § 5A:8.8 : Section 10(b) Liability for Non-Disclosure of Information Required Under Item 3035A-102
Chapter 5B: Stock Exchange Annual Reporting and Compliance Certifications
  • § 5B:1 : Overview5B-1
  • § 5B:2 : NYSE Reporting and Certification Requirements5B-2
    • § 5B:2.1 : Text of Listed Company Manual Section 303.12(a) and (c)5B-2
    • § 5B:2.2 : CEO Certification5B-2
    • § 5B:2.3 : Annual Written Affirmations5B-3
    • § 5B:2.4 : NYSE Forms5B-3
      • [A] : CEO Certification5B-3
      • [B] : Annual Written Affirmations for U.S. Issuers5B-5
      • [C] : Annual Written Affirmation for Non-U.S. Issuers5B-35
Chapter 5C: Form 8-K Reports
  • § 5C:1 : Overview5C-2
  • § 5C:2 : Item-by-Item Discussion of Form 8-K5C-4
    • § 5C:2.1 : Item 1.01—Entry into a Material Definitive Agreement5C-6
    • § 5C:2.2 : Item 1.02—Termination of a Material Definitive Agreement5C-8
    • § 5C:2.3 : Item 1.03—Bankruptcy or Receivership5C-9
    • § 5C:2.4 : Item 1.04—Mine Safety—Reporting of Shutdowns and Patterns of Violations5C-10
    • § 5C:2.5 : Item 2.01—Completion of Significant Acquisitions or Dispositions of Assets5C-10
    • § 5C:2.6 : Item 2.02—Results of Operations and Financial Condition5C-11
    • § 5C:2.7 : Item 2.03—Creation of a Material Direct Financial Obligation or Obligation Under an Off-Balance Sheet Arrangement That Is Material to the Company5C-11
    • § 5C:2.8 : Item 2.04—Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement5C-14
    • § 5C:2.9 : Item 2.05—Costs Associated with Exit or Disposal Activities5C-15
    • § 5C:2.10 : Item 2.06—Material Impairments5C-16
    • § 5C:2.11 : Item 3.01—Notice of Delisting or Failure to Satisfy Listing Rule or Standard; Transfer of Listing5C-16
    • § 5C:2.12 : Items 3.02 and 3.03—Unregistered Sales of Equity Securities; Material Modifications to Rights of Security Holders5C-18
    • § 5C:2.13 : Item 4.01—Changes in Registrant’s Certifying Accountant5C-19
    • § 5C:2.14 : Item 4.02—Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review5C-19
    • § 5C:2.15 : Item 5.01—Changes in Control of Registrant5C-20
    • § 5C:2.16 : Item 5.02(a)—A Director Resigns or Declines to Stand for Re-Election Due to a Disagreement or Is Removed for Cause5C-21
    • § 5C:2.17 : Item 5.02(b)—Certain Officers Retire, Resign or Are Terminated; a Director Retires, Resigns, Is Removed or Declines to Stand for Re-Election for Any Reason Other Than a Disagreement or for Cause5C-22
    • § 5C:2.18 : Items 5.02(c), (d), (e) and (f)—Election of New Directors; Appointment of Certain New Officers and Compensatory Arrangements of Certain Officers5C-23
      • [A] : Items 5.02(c) and (d)—Company Appoints Certain New Officers or a New Director Is Elected5C-23
      • [B] : Items 5.02(e) and (f)—Compensatory Arrangements of Certain Officers5C-24
    • § 5C:2.19 : Item 5.03—Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year5C-25
    • § 5C:2.20 : Item 5.04—Temporary Suspension of Trading Under Registrant’s Employee Benefit Plans5C-26
    • § 5C:2.21 : Item 5.05—Amendments to Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics5C-26
    • § 5C:2.22 : Item 5.07—Submission of Matters to a Vote of Security Holders5C-26
    • § 5C:2.23 : Item 5.08—Shareholder Director Nominations5C-28
    • § 5C:2.24 : Item 7.01—Regulation FD Disclosure5C-29
    • § 5C:2.25 : Item 8.01—Other Events5C-29
    • § 5C:2.26 : Item 9.01—Financial Statements and Exhibits5C-29
    • § 5C:2.27 : Asset-Backed Securities5C-29
      • [A] : Item 6.01—ABS Informational and Computational Material5C-30
      • [B] : Item 6.02—Change of Servicer or Trustee5C-30
      • [C] : Item 6.03—Change in Credit Enhancement or Other External Support5C-31
      • [D] : Item 6.04—Failure to Make a Required Distribution5C-31
      • [E] : Item 6.05—Securities Act Updating Disclosure5C-31
    • § 5C:2.28 : Shell Companies5C-32
  • § 5C:3 : Liability Issues and Safe Harbor5C-34
Chapter 5D: Stock Exchange Interim Reporting and Compliance Affirmations
  • § 5D:1 : Overview5D-1
  • § 5D:2 : NYSE Interim Reporting Requirements5D-2
    • § 5D:2.1 : Text of Listed Company Manual Section 303A.12(b) and (c)5D-2
    • § 5D:2.2 : CEO Notice of Noncompliance5D-2
    • § 5D:2.3 : Interim Written Affirmations5D-3
    • § 5D:2.4 : NYSE Forms5D-4
      • [A] : Interim Written Affirmation for U.S. Issuers5D-4
      • [B] : Interim Written Affirmation for Non-U.S. Issuers5D-19
  • § 5D:3 : Nasdaq Interim Reporting Requirements5D-27
    • § 5D:3.1 : Text of Nasdaq Rule 56255D-27
    • § 5D:3.2 : Notice of Noncompliance5D-27
Chapter 5E: Website Disclosures
  • § 5E:1 : Overview5E-3
  • § 5E:2 : NYSE Requirement to Have and Maintain a Website5E-5
    • § 5E:2.1 : Text of Listed Company Manual Section 307.005E-5
    • § 5E:2.2 : Discussion5E-5
  • § 5E:3 : Mandatory Website Disclosures5E-5
    • § 5E:3.1 : SEC Requirements5E-5
      • [A] : Website Disclosure of Periodic Filings5E-5
        • [A][1] : Text of Regulation S-K, Item 101(e)5E-5
        • [A][2] : Discussion5E-6
      • [B] : Posting of Interactive Data Files (XBRL Exhibits)5E-8
        • [B][1] : Text of Regulation S-T, Rule 405(g)5E-8
        • [B][2] : Discussion5E-8
      • [C] : Website Disclosure of Director Independence Standards5E-9
        • [C][1] : Text of Regulation S-K, Item 407(a)(2)5E-9
        • [C][2] : Discussion5E-9
      • [D] : Website Disclosure of Committee Charters5E-9
        • [D][1] : Text of Regulation S-K, Item 407, Instruction 25E-9
        • [D][2] : Discussion5E-10
      • [E] : Intent to Delist or Deregister5E-10
        • [E][1] : Text of Rule 12d2-2(c)5E-10
        • [E][2] : Discussion5E-11
      • [F] : Use of Conflict Minerals5E-11
        • [F][1] : Text of Form SD, Item 1.01(b) and (c)5E-11
        • [F][2] : Discussion5E-13
    • § 5E:3.2 : NYSE Requirements5E-13
      • [A] : Posting of Annual Reports5E-13
        • [A][1] : Text of Listed Company Manual Section 203.015E-13
        • [A][2] : Discussion5E-14
      • [B] : Nominating Committee Charter5E-14
        • [B][1] : Text of Listed Company Manual Section 303A.045E-14
        • [B][2] : Discussion5E-15
      • [C] : Compensation Committee Charter5E-15
        • [C][1] : Text of Listed Company Manual Section 303A.05(b)5E-15
        • [C][2] : Discussion5E-16
      • [D] : Audit Committee Charter5E-16
        • [D][1] : Text of Listed Company Manual Section 303A.07(b)5E-16
        • [D][2] : Discussion5E-16
      • [E] : Corporate Governance Guidelines5E-16
        • [E][1] : Excerpt from Listed Company Manual Section 303A.095E-16
        • [E][2] : Discussion5E-17
      • [F] : Code of Business Conduct and Ethics5E-17
        • [F][1] : Text of Listed Company Manual Section 303A.105E-17
        • [F][2] : Discussion5E-17
    • § 5E:3.3 : Nasdaq Requirements5E-18
      • [A] : Disclosure Requirement for Units5E-18
        • [A][1] : Text of Nasdaq Rule 5225(a)(3)5E-18
        • [A][2] : Discussion5E-18
  • § 5E:4 : Optional Website Disclosures5E-19
    • § 5E:4.1 : Optional Website Disclosures Under SEC Rules5E-19
      • [A] : Reconciliation on Website of Non-GAAP Financial Measures5E-19
        • [A][1] : Text of Regulation G, Rule 100, Note 15E-19
        • [A][2] : Discussion5E-19
      • [B] : Code of Ethics5E-19
        • [B][1] : Text of Regulation S-K, Item 4065E-19
        • [B][2] : Text of Form 8-K, Item 5.055E-20
        • [B][3] : Discussion5E-21
      • [C] : Director Attendance at Board Meetings5E-21
        • [C][1] : Text of Regulation S-K, Item 407(b)5E-21
        • [C][2] : Discussion5E-21
      • [D] : Shareholder Communications5E-21
        • [D][1] : Text of Regulation S-K, Item 407(f)5E-21
        • [D][2] : Discussion5E-22
      • [E] : Incorporating Information by Reference on Form S-15E-22
        • [E][1] : Text of Form S-1, General Instruction VII5E-22
        • [E][2] : Discussion5E-23
    • § 5E:4.2 : Disclosures Under the NYSE Listed Company Manual5E-23
      • [A] : Disclosure of a Single Director Presiding at All Executive Sessions5E-23
        • [A][1] : Excerpt from Listed Company Manual Section 303A.035E-23
        • [A][2] : Discussion5E-23
      • [B] : Disclosure of a Method for Interested Parties to Communicate with Directors5E-24
        • [B][1] : Excerpt from Listed Company Manual Section 303A.035E-24
        • [B][2] : Discussion5E-24
      • [C] : Disclosure of Audit Committee Members Simultaneously Serving on the Audit Committees of Other Public Companies5E-24
        • [C][1] : Text of Listed Company Manual Section 303A.075E-24
        • [C][2] : Text of Listed Company Manual Section 303A.07(a)5E-24
        • [C][3] : Discussion5E-25
      • [D] : Disclosure of Waivers of Code of Conduct and Ethics5E-25
        • [D][1] : Excerpt from Listed Company Manual Section 303A.105E-25
        • [D][2] : Discussion5E-25
      • [E] : Disclosure for Foreign Private Issuers Regarding Differences in Corporate Governance Practices5E-26
        • [E][1] : Text of Listed Company Manual Section 303A.115E-26
        • [E][2] : Discussion5E-26
      • [F] : Contributions to Tax Exempt Organizations Related to Directors5E-27
        • [F][1] : Text of Listed Company Manual Section 303A.025E-27
        • [F][2] : Discussion5E-27
    • § 5E:4.3 : Optional Website Disclosures Under Nasdaq Rules5E-28
      • [A] : Distribution of Annual Reports5E-28
        • [A][1] : Text of Nasdaq Rule 5250(d)(1)5E-28
        • [A][2] : Discussion5E-29
      • [B] : Disclosure of Non-Independent Directors under Exceptional and Limited Circumstances5E-29
        • [B][1] : Text of Nasdaq Rule 5605(c)(2)(B)5E-29
        • [B][2] : Text of Nasdaq Rule 5605(d)(2)(B)5E-29
        • [B][3] : Text of Nasdaq Rule 5605(e)(3)5E-30
        • [B][4] : Discussion5E-30
      • [C] : Disclosure of Waivers to Code of Ethics5E-31
        • [C][1] : Text of Nasdaq Rule 56105E-31
        • [C][2] : Discussion5E-31
      • [D] : Disclosure for Foreign Private Issuers Regarding Differences in Corporate Governance Practices5E-32
        • [D][1] : Text of Nasdaq Rule IM-5615-35E-32
        • [D][2] : Discussion5E-33
Chapter 5F: Timely Disclosure: Regulation FD
  • § 5F:1 : Overview5F-2
  • § 5F:2 : Regulation FD Requirements5F-4
    • § 5F:2.1 : Text of Regulation FD5F-4
    • § 5F:2.2 : Who Is Covered by Regulation FD?5F-9
    • § 5F:2.3 : Intentional vs. Unintentional Disclosure5F-11
    • § 5F:2.4 : Method of Disclosure5F-12
    • § 5F:2.5 : What Is “Adequate” Dissemination?5F-13
      • [A] : Use of Company Website5F-13
      • [B] : Use of Social Media5F-14
    • § 5F:2.6 : What Is “Material” Information?5F-15
      • [A] : Earnings or Guidance5F-17
      • [B] : Nonmaterial Information5F-17
      • [C] : Additional Materiality Considerations5F-18
  • § 5F:3 : Enforcement5F-18
    • § 5F:3.1 : Selected SEC Enforcement Actions5F-20
      • [A] : SEC v. Siebel Systems5F-20
      • [B] : SEC v. Schering-Plough Corporation and Richard Kogan5F-21
      • [C] : SEC v. Flowserve Corp.5F-21
      • [D] : SEC v. Black5F-22
      • [E] : Presstek5F-22
      • [F] : SEC v. Office Depot, Inc.5F-23
      • [G] : Fifth Third Bancorp5F-23
      • [H] : In re Lawrence D. Polizzotto5F-24
  • § 5F:4 : Particular Regulation FD Issues5F-25
    • § 5F:4.1 : Earnings Guidance and Changes in Information5F-25
    • § 5F:4.2 : Analyst/Investor Meetings5F-26
    • § 5F:4.3 : Share Price Movement5F-27
    • § 5F:4.4 : Securities Offerings5F-28
    • § 5F:4.5 : Media Involvement5F-28
    • § 5F:4.6 : Authorized vs. Non-Authorized Spokespersons5F-29
  • § 5F:5 : Policies and Procedures5F-29
  • § 5F:6 : Stock Exchange Requirements5F-30
    • § 5F:6.1 : Text of NYSE Rules Relating to Timely Disclosure5F-31
    • § 5F:6.2 : Text of Nasdaq Rules Relating to Timely Disclosure5F-34
    • § 5F:6.3 : Discussion5F-39
Chapter 5G: Non-GAAP Financial Measures
  • § 5G:1 : Overview5G-2
  • § 5G:2 : Background to Regulation G5G-3
    • § 5G:2.1 : SEC Cautionary Advice (December 2001)5G-4
      • [A] : The SEC’s Three Principles5G-5
        • [A][1] : Set Forth Controlling Principles Underlying the Non-GAAP Presentation5G-5
        • [A][2] : Provide Clear and Comprehensible Information Regarding Omissions5G-5
        • [A][3] : Pro Forma Earnings Releases Should Always Be Accompanied by a Clearly Described Reconciliation to GAAP5G-6
      • [B] : Matters Not Addressed5G-6
    • § 5G:2.2 : Trump Enforcement Action (January 2002)5G-6
      • [A] : Factual Findings5G-7
      • [B] : SEC Findings5G-8
      • [C] : Implications5G-9
    • § 5G:2.3 : Text of SOA Section 401(b)5G-9
  • § 5G:3 : Required Reconciliation in Public Announcements—Regulation G5G-10
    • § 5G:3.1 : Text of Regulation G5G-10
    • § 5G:3.2 : Definition of a “Non-GAAP Measure”5G-13
      • [A] : Examples of Non-GAAP Measures5G-14
      • [B] : Financial Measures Not Captured5G-14
    • § 5G:3.3 : Reconciliation5G-17
      • [A] : Most Directly Comparable GAAP Measure5G-18
      • [B] : No Misleading Information5G-18
      • [C] : Oral, Telephonic, Webcast, or Broadcast Releases5G-19
      • [D] : Forward-Looking Quantitative Reconciliation5G-20
      • [E] : Segment Reporting Quantitative Reconciliation5G-20
      • [F] : EBIT and EBITDA5G-20
    • § 5G:3.4 : “Public” Disclosure and Relationship to Regulation FD5G-21
    • § 5G:3.5 : Liability Considerations Under Regulation G5G-22
  • § 5G:4 : Expanded Disclosure of Non-GAAP Information in SEC Filings5G-22
    • § 5G:4.1 : Text of Regulation S-K Item 105G-23
    • § 5G:4.2 : Required Disclosures5G-26
    • § 5G:4.3 : Prohibited Disclosures in SEC Filings5G-29
      • [A] : Exclusion of “Non-Recurring” Items5G-29
        • [A][1] : SEC Filings5G-29
        • [A][2] : All Public Announcements5G-31
        • [A][3] : Specific Application to MD&A5G-31
      • [B] : Non-GAAP Liquidity Measures5G-31
      • [C] : Non-GAAP Per-Share Measures5G-32
  • § 5G:5 : Application of Non-GAAP Rules to Form 8-K Furnishing of Earnings Releases by U.S. Companies5G-34
  • § 5G:6 : Application of Non-GAAP Rules to Business Combinations5G-35
  • § 5G:7 : Non-U.S. Companies5G-36
    • § 5G:7.1 : Regulation G5G-36
    • § 5G:7.2 : Additional Limitations on Non-GAAP Information in SEC Filings5G-37
    • § 5G:7.3 : No Furnishing of Earnings Releases5G-39
    • § 5G:7.4 : Specific Situations Involving Non-U.S. Companies5G-39
      • [A] : Earnings Releases5G-39
      • [B] : Home-Country Annual Reports5G-39
      • [C] : Annual Reports on Form 20-F5G-40
  • § 5G:8 : Voluntary Filers5G-40
  • § 5G:9 : Practical Suggestions for Affected U.S. and Non-U.S. Companies5G-40
Chapter 5H: SEC Review Process
  • § 5H:1 : Overview5H-1
  • § 5H:2 : The SEC Review Process5H-2
    • § 5H:2.1 : Background5H-2
    • § 5H:2.2 : Text of SOA Section 4085H-3
    • § 5H:2.3 : SEC Description of Approach5H-3
      • [A] : Conduct of Periodic Review Process5H-5
      • [B] : Reconsideration of SEC Staff Comments5H-6
    • § 5H:2.4 : Enhanced Reviews of Large and Financially Significant Companies5H-8
    • § 5H:2.5 : Review by Office of Global Security Risk5H-8
  • § 5H:3 : Confidential Submission Procedures5H-12
    • § 5H:3.1 : Confidential Submission Process for Emerging Growth Companies5H-13
    • § 5H:3.2 : Confidential Submission Process for Other New Registrants5H-15
    • § 5H:3.3 : Non-Public Submissions from Foreign Private Issuers5H-17
  • § 5H:4 : Public Release of Comment Letters and Non-Public Response Letters5H-18
    • § 5H:4.1 : Background5H-18
    • § 5H:4.2 : Automatic Public Availability Through EDGAR Database5H-19
    • § 5H:4.3 : Availability of Confidential Treatment5H-20
      • [A] : General Principles5H-20
      • [B] : Steps to Claim FOIA Protection5H-22
      • [C] : The “Supplemental Information” Approach5H-24
    • § 5H:4.4 : “Tandy Letter” Requirement5H-25
Chapter 5I: Disclosure Controls and Procedures
  • § 5I:1 : Overview5I-2
  • § 5I:2 : Disclosure Controls and Procedures (Rules 13a-15, 15d-15, Regulation S-K Item 307)5I-2
    • § 5I:2.1 : Text of Rules5I-3
      • [A] : Rule 13a-155I-3
      • [B] : Regulation S-K Item 3075I-4
    • § 5I:2.2 : Requirements5I-4
      • [A] : Objective—Accuracy and Timeliness of Exchange Act Filings5I-4
      • [B] : Definition of Disclosure Controls and Procedures5I-5
      • [C] : Evaluation, Including Regulation S-K Item 307 Disclosure5I-6
      • [D] : SEC Enforcement Action5I-9
    • § 5I:2.3 : Suggested Approach to Develop Procedures5I-10
      • [A] : Attributes of Desirable Procedures5I-10
      • [B] : Document Existing Procedures5I-11
      • [C] : Information-Gathering Procedures5I-12
        • [C][1] : Training to Increase Sensitivity to Disclosure Requirements5I-12
        • [C][2] : Methods of Gathering Information5I-12
        • [C][3] : Business Units5I-13
        • [C][4] : Management Review of Reports5I-13
      • [D] : Oversight/Disclosure Management5I-14
        • [D][1] : Disclosure Compliance Calendar5I-14
        • [D][2] : Disclosure Committee5I-15
      • [E] : Verification5I-16
        • [E][1] : Back-Up Certifications5I-16
        • [E][2] : Third-Party Support5I-17
        • [E][3] : Task Forces5I-18
    • § 5I:2.4 : Suggested Approach for Management Evaluation5I-18
      • [A] : When the Evaluation Should Be Conducted5I-18
      • [B] : How to Conduct the Evaluation5I-19
  • § 5I:3 : Relationship of Disclosure Controls and Procedures and Accounting Controls5I-20
Chapter 5J: Internal Control Over Financial Reporting
  • § 5J:1 : Overview5J-3
  • § 5J:2 : Internal Control Over Financial Reporting (SOA Section 404, Regulation S-X Rule 2-02(f), Regulation S-K Item 308, Rule 13a-15)5J-4
    • § 5J:2.1 : Text of Requirements5J-5
      • [A] : Text of SOA Section 4045J-5
      • [B] : Regulation S-X Rule 2-02(f)5J-6
      • [C] : Regulation S-K Item 3085J-7
      • [D] : Rule 13a-155J-8
    • § 5J:2.2 : Meaning of Internal Controls5J-10
      • [A] : Exchange Act Section 13(b)(2)5J-10
      • [B] : Auditing Standards—AS No. 125J-11
      • [C] : COSO Report5J-12
      • [D] : Definition—Internal Control Over Financial Reporting5J-14
    • § 5J:2.3 : Annual Internal Control Report5J-16
      • [A] : Statement of Management’s Responsibilities5J-17
      • [B] : Framework of Evaluation5J-18
      • [C] : Conclusions About Effectiveness5J-18
        • [C][1] : General5J-18
        • [C][2] : Impact of Recently Acquired Entities, Equity Investees, and Consolidated SPEs on Management’s Report5J-21
          • [C][2][a] : Recently Acquired Entities5J-21
          • [C][2][b] : Equity Investees5J-24
          • [C][2][c] : Special Purpose Entities5J-24
          • [C][2][d] : Entities Accounted for on a Proportionate Consolidation Basis5J-26
        • [C][3] : Effect of Adverse Conclusion As to Effectiveness of Internal Control Over Financial Reporting on Form S-3 and Similar Eligibility5J-27
      • [D] : Attestation Report of Auditors5J-27
      • [E] : Early Initiatives to Improve Implementation of SOA Section 4045J-28
        • [E][1] : May 2005 Initiatives to Improve Implementation of SOA Section 4045J-28
          • [E][1][a] : Concepts of Materiality and Reasonable Assurance5J-29
          • [E][1][b] : Top-Down, Risk-Based Approach5J-30
          • [E][1][c] : Identifying Significant Accounts and Procedures5J-30
          • [E][1][d] : Timing of Assessment or Audit5J-31
        • [E][2] : SEC and PCAOB Initiatives in 2006 to Improve Implementation of SOA Section 4045J-31
          • [E][2][a] : Concept Release Relating to Additional Guidance for Management5J-32
          • [E][2][b] : Amendments to Auditing Standard No. 25J-32
          • [E][2][c] : Audit Firm Inspections5J-32
      • [F] : SEC Interpretive Guidance for Management’s Assessment5J-33
        • [F][1] : Summary5J-33
        • [F][2] : Implications5J-35
        • [F][3] : Overview5J-36
          • [F][3][a] : Focus on Two General Principles5J-36
          • [F][3][b] : Focus on Reasonable Assurance5J-36
          • [F][3][c] : Revised Definition of Material Weakness and Significant Deficiency5J-37
        • [F][4] : Evaluating Design Effectiveness of Internal Control Over Financial Reporting5J-38
          • [F][4][a] : Identifying Financial Reporting Risks5J-38
          • [F][4][b] : Identifying Controls that Adequately Address Financial Reporting Risks5J-40
            • [F][4][b][i] : General5J-40
            • [F][4][b][ii] : Guidance Relating to Entity-Level Controls and Information Technology General Controls5J-40
          • [F][4][c] : Documenting Management’s Assessment of the Design Effectiveness of Controls5J-41
        • [F][5] : Evaluating Operating Effectiveness of Internal Control Over Financial Reporting5J-42
          • [F][5][a] : Determining the Evidence Needed to Support Management’s Assessment5J-42
          • [F][5][b] : Procedures for Collecting Evidence of Operating Effectiveness5J-43
          • [F][5][c] : Documentation Requirements5J-44
          • [F][5][d] : Controls Operating at Multiple Locations5J-45
        • [F][6] : Evaluating Control Deficiencies5J-45
        • [F][7] : Disclosure Considerations5J-47
          • [F][7][a] : Reporting on a Material Weakness5J-47
          • [F][7][b] : Effect of a Restatement on Management’s Report5J-48
          • [F][7][c] : Scope Limitations5J-48
        • [F][8] : Non-Exclusive Safe Harbor5J-48
      • [G] : Studies and Committees Addressing Smaller Public Companies5J-49
    • § 5J:2.4 : Quarterly Evaluation and Disclosure of Internal Control5J-50
    • § 5J:2.5 : Internal Control Reports of Insured Depository Institutions and Bank Holding Companies5J-52
Chapter 5K: Audits of Internal Control Over Financial Reporting
  • § 5K:1 : Overview5K-3
  • § 5K:2 : Auditing Standard Relating to Audits of Internal Control Over Financial Reporting5K-3
    • § 5K:2.1 : Background5K-3
      • [A] : Statutory Requirements and Regulatory History5K-3
      • [B] : Required Review5K-5
      • [C] : “Audit” Versus “Attest”5K-5
    • § 5K:2.2 : Implications for Reporting Companies, Management, and Audit Committees5K-6
      • [A] : Increased Time, Effort, and Expense Associated with the Audit5K-6
      • [B] : Management’s Additional Obligations with Respect to the Internal Control Audit5K-8
      • [C] : Auditor Review of the Audit Committee5K-8
      • [D] : Written Consent of Auditor Required to Include Internal Control Audit Report in SEC Filings5K-9
    • § 5K:2.3 : Summary of Auditing Standard No. 55K-9
      • [A] : Objective of the Audit5K-9
      • [B] : Considerations When Planning and Performing the Audit5K-10
        • [B][1] : Planning the Audit5K-10
        • [B][2] : Role of Risk Assessment5K-11
        • [B][3] : Risk of Fraud5K-11
        • [B][4] : Using the Work of Others5K-11
        • [B][5] : Top-Down Approach5K-12
          • [B][5][a] : Identifying and Assessing Entity-Level Controls5K-12
          • [B][5][b] : Guidance in Identifying Significant Accounts and Disclosures and Their Relevant Assertions5K-14
        • [B][6] : Understanding Likely Sources of Misstatement and Walkthroughs5K-15
      • [C] : Testing Controls5K-15
        • [C][1] : Testing Design and Operating Effectiveness5K-15
        • [C][2] : Risk-Based Approach to Gathering Evidence5K-16
        • [C][3] : Timing of Tests of Controls5K-17
      • [D] : Evaluating Identified Deficiencies5K-17
      • [E] : Considerations Regarding Multiple Locations and Business Units5K-18
      • [F] : Considerations Regarding Benchmarking of Automated Controls5K-18
      • [G] : Management Representation Letter5K-19
      • [H] : Audit Opinion5K-20
        • [H][1] : Material Weakness5K-21
        • [H][2] : Additional Report Modifications5K-21
      • [I] : Required Communications with the Audit Committee and Management5K-22
      • [J] : Subsequent Events5K-23
      • [K] : Special Situations5K-23
      • [L] : Inclusion of the Audit Report in SEC Filings5K-23
      • [M] : Quarterly Certifications5K-24
      • [N] : Pre-Approval of Internal Control-Related Non-Audit Services5K-25
  • § 5K:3 : Auditing Standard: Reporting on the Correction of a Material Weakness5K-26
    • § 5K:3.1 : Background5K-26
    • § 5K:3.2 : Management’s Report on a Previously Reported Material Weakness5K-27
      • [A] : Required Elements, Location, and Effect of an Auditor’s Opinion5K-27
      • [B] : Control Objectives5K-30
      • [C] : Date of Management’s Assertion5K-31
    • § 5K:3.3 : Management’s Responsibilities Regarding the Engagement5K-31
      • [A] : Conditions to the Engagement5K-31
      • [B] : Required Representations5K-32
    • § 5K:3.4 : Forming an Opinion and Reporting on Management’s Assertion5K-33
      • [A] : A Company’s Outside Auditors Must Provide the Report5K-33
      • [B] : Forming an Opinion on Management’s Assessment5K-33
      • [C] : Form of Auditor’s Report5K-35
      • [D] : Auditor’s Determination That a Previously Reported Material Weakness Continues to Exist5K-36
      • [E] : Use of the Work of Others5K-37
  • § 5K:4 : PCAOB Staff Guidance for Auditors of Smaller, Less Complex Companies5K-38
Chapter 5L: Management Certifications
  • § 5L:1 : Overview5L-3
  • § 5L:2 : Section 302 Certification Rules5L-5
    • § 5L:2.1 : Text of Requirements5L-6
      • [A] : Text of SOA Section 3025L-6
      • [B] : Rule 13a-145L-6
    • § 5L:2.2 : Issuers Covered5L-7
    • § 5L:2.3 : Filings Covered5L-8
      • [A] : Report Forms Covered5L-8
      • [B] : Forward Incorporated Documents5L-8
      • [C] : Amendments5L-8
  • § 5L:3 : Content of Certification5L-9
    • § 5L:3.1 : Paragraph 1—Review5L-10
      • [A] : Certification Text5L-10
        • [A][1] : SOA Section 3025L-10
        • [A][2] : Item 601(b)(31)(i) of Regulation S-K5L-10
      • [B] : Discussion5L-10
    • § 5L:3.2 : Paragraph 2—Material Accuracy5L-10
      • [A] : Certification Text5L-10
        • [A][1] : SOA Section 3025L-10
        • [A][2] : Item 601(b)(31)(i) of Regulation S-K5L-10
      • [B] : Discussion5L-10
    • § 5L:3.3 : Paragraph 3—Fair Presentation of Financial Information5L-11
      • [A] : Certification Text5L-11
        • [A][1] : SOA Section 3025L-11
        • [A][2] : Item 601(b)(31)(i) of Regulation S-K5L-11
      • [B] : Discussion5L-11
    • § 5L:3.4 : Paragraphs 4(a) and (c)—Evaluation of Disclosure Controls and Procedures5L-12
      • [A] : Certification Text5L-12
        • [A][1] : SOA Section 3025L-12
        • [A][2] : Item 601(b)(31)(i) of Regulation S-K5L-13
      • [B] : Discussion5L-13
    • § 5L:3.5 : Paragraphs 4(b) and (d) and 5—Internal Control Over Financial Reporting5L-14
      • [A] : Certification Text5L-14
        • [A][1] : SOA Section 3025L-14
        • [A][2] : Item 601(b)(31)(i) of Regulation S-K5L-15
      • [B] : Discussion5L-16
        • [B][1] : Paragraphs 4(b) and (d)5L-16
        • [B][2] : Paragraph 55L-16
          • [B][2][a] : Meaning of “Significant Deficiencies” and “Material Weaknesses”5L-16
          • [B][2][b] : Fraud5L-17
          • [B][2][c] : Timing of Evaluation5L-17
  • § 5L:4 : Mechanics of Certification5L-18
    • § 5L:4.1 : Form5L-18
    • § 5L:4.2 : Signatures5L-19
    • § 5L:4.3 : Location5L-19
  • § 5L:5 : Special Types of Issuers5L-20
    • § 5L:5.1 : Non-U.S. Companies5L-20
    • § 5L:5.2 : Non-U.S. Governments (Schedule B Issuers)5L-21
    • § 5L:5.3 : Registered Investment Companies5L-22
      • [A] : Certification Requirements5L-22
        • [A][1] : Certification Text5L-22
          • [A][1][a] : Rule 30a-25L-22
          • [A][1][b] : Item 12(a)(2) of Form N-CSR5L-23
          • [A][1][c] : Item 3 of Form N-Q5L-25
        • [A][2] : Discussion5L-25
      • [B] : Disclosures to Be Certified5L-27
        • [B][1] : Rule 30b2-1 and Form N-CSR and Rule 30b15 and Form NQ5L-27
          • [B][1][a] : Text of Rule 30b2-15L-27
          • [B][1][b] : Discussion of Rule 30b2-1 and Form N-CSR5L-27
          • [B][1][c] : Text of Rule 30b1-55L-28
          • [B][1][d] : Discussion of Rule 30b1-5 and Form N-Q5L-28
        • [B][2] : Designation of Form N-CSR and Form N-Q As Exchange Act Periodic Reports5L-29
          • [B][2][a] : Text of Rule 30d-15L-29
          • [B][2][b] : Discussion of Rule 30d-15L-30
    • § 5L:5.4 : Asset-Backed Issuers5L-30
      • [A] : Certification Requirement5L-30
        • [A][1] : Text of Rule 13a-14(d)–(e)5L-30
        • [A][2] : Text of Item 601(b)(31)(ii) of Regulation S-K5L-31
      • [B] : Discussion5L-32
  • § 5L:6 : Certification Required by SOA Section 906 (Adding 18 U.S.C. § 1350)5L-33
    • § 5L:6.1 : Reports Covered5L-34
      • [A] : Text of Requirements5L-34
        • [A][1] : Text of 18 U.S.C. § 1350(a) (Added by SOA Section 906)5L-34
        • [A][2] : Text of Rule 13a-14(b)5L-34
      • [B] : Discussion5L-35
      • [C] : Reports Not Covered5L-35
    • § 5L:6.2 : Content5L-37
      • [A] : Text of 18 U.S.C. § 1350(b) (Added by SOA Section 906)5L-37
      • [B] : Discussion5L-37
        • [B][1] : Fully Complies5L-37
        • [B][2] : Fairly Presents5L-38
        • [B][3] : Suggested Form of SOA Section 906 Certification5L-38
    • § 5L:6.3 : Submission Method5L-39
    • § 5L:6.4 : Relationship to Section 302 Certification5L-39
    • § 5L:6.5 : Penalties5L-40
      • [A] : Text of Statute5L-40
        • [A][1] : 18 U.S.C. § 1350(c) (Added by SOA Section 906)5L-40
        • [A][2] : SOA Section 3(b)(1)5L-40
      • [B] : Discussion5L-40
  • § 5L:7 : NYSE CEO Certification5L-43
Chapter 5M: Insider Trading Policies and Blackouts
  • § 5M:1 : Overview5M-3
  • § 5M:2 : Insider Trading and Blackouts Under Exchange Act Section 10(b) and Rule 10b55M-5
    • § 5M:2.1 : Text of Requirements5M-6
      • [A] : Section 10(b) of the Exchange Act5M-6
      • [B] : Rule 10b-5 Under the Exchange Act5M-7
      • [C] : Rule 10b5-1(c) Under the Exchange Act5M-7
    • § 5M:2.2 : Determining the Beginning and the End of a Blackout Period5M-8
      • [A] : Blackout Periods Related to Earnings Announcements5M-8
      • [B] : Blackout Periods Related to Specific Corporate Events5M-9
    • § 5M:2.3 : Determining Who Is Subject to a Blackout Policy5M-10
    • § 5M:2.4 : Pre-Clearance of Trades and Trading Outside Blackout Periods5M-11
    • § 5M:2.5 : Window Periods5M-11
    • § 5M:2.6 : Affirmative Defenses Under Rule 10b5-15M-12
      • [A] : Requirements for Written Plan Defense5M-12
        • [A][1] : Specificity of Trade Information3M-13
        • [A][2] : Purchase and/or Sale Pursuant to the Plan5M-14
        • [A][3] : The Good Faith Requirement5M-14
        • [A][4] : Termination of a Plan5M-15
      • [B] : The Binding Contract or Instruction Defense5M-15
      • [C] : SEC Staff Guidance5M-15
        • [C][1] : Rule 10b5-1 Plan Requirements5M-16
        • [C][2] : Rule 10b5-1 Plans That Delegate Investment Discretion3M-18
        • [C][3] : Options Transactions3M-18
        • [C][4] : 401(k) Plan Transactions5M-19
        • [C][5] : Form 144 Filing Requirements5M-19
  • § 5M:3 : Compliance Procedures for Section 16 Reporting5M-20
    • § 5M:3.1 : Background5M-20
    • § 5M:3.2 : Section 16 Reporting Requirements5M-20
      • [A] : Securities Covered5M-20
      • [B] : Reporting Persons5M-21
        • [B][1] : Officers5M-21
        • [B][2] : Beneficial Owners5M-21
      • [C] : Forms to Be Filed5M-22
      • [D] : Timing for Reporting on Forms 3, 4 and 55M-22
        • [D][1] : Form 4 Two-Day Reporting5M-22
        • [D][2] : Limited Exceptions Permitting Delayed Form 4 Reporting5M-24
        • [D][3] : Form 3 Reporting5M-25
        • [D][4] : Form 5 Reporting5M-25
      • [E] : Electronic Filing Procedures5M-26
        • [E][1] : Electronic Filing5M-26
        • [E][2] : Hardship Exemptions and Filing Date Adjustments5M-27
        • [E][3] : Time of Filing5M-27
      • [F] : Additional Disclosure5M-28
        • [F][1] : Issuer Website Publication5M-28
        • [F][2] : Annual Report and Proxy Statement Disclosure5M-29
    • § 5M:3.3 : Section 16 Compliance Procedures5M-29
      • [A] : Insider Trading Compliance Policy5M-29
      • [B] : Filing Procedures/Assistance for Reporting Persons5M-30
      • [C] : Other Compliance Measures5M-31
  • § 5M:4 : Benefit Plan Blackouts (SOA Section 306, Regulation BTR and DOL Advance Notice Rule)5M-31
    • § 5M:4.1 : Text of Requirements5M-32
      • [A] : Text of Regulation BTR5M-32
      • [B] : Item 5.04 of Form 8-K5M-43
    • § 5M:4.2 : Discussion of Regulation BTR and SOA Section 306(a)5M-43
      • [A] : Issuers and Insiders Subject to the Rule5M-44
        • [A][1] : Issuers5M-44
        • [A][2] : Directors5M-44
        • [A][3] : Executive Officers5M-45
      • [B] : Plan Blackouts Subject to the Rule5M-45
        • [B][1] : Individual Account Plans5M-45
        • [B][2] : Blackout Period5M-47
        • [B][3] : Calculating the 50% Threshold5M-47
        • [B][4] : Blackout Period Exceptions5M-48
      • [C] : Prohibited Insider Trades During a Blackout Period5M-49
        • [C][1] : Securities Subject to the Blackout Trading Restrictions5M-50
        • [C][2] : Securities “Acquired in Connection with Service or Employment As a Director or Executive Officer”5M-51
        • [C][3] : Securities Traded During a Blackout Period Considered “Acquired in Connection with Service” Unless Traced to Another Source5M-52
        • [C][4] : Transactions Exempt from the Blackout Trading Restrictions5M-53
      • [D] : Content and Timing of Notice to Insiders and the SEC5M-55
        • [D][1] : Content of Notice5M-55
        • [D][2] : Timing of Notice to Insiders5M-55
        • [D][3] : Timing of Notice to the SEC5M-56
        • [D][4] : Department of Labor’s Model Notice5M-57
      • [E] : Remedies5M-57
        • [E][1] : General5M-57
        • [E][2] : Calculation of Realized Profits5M-57
        • [E][3] : SEC Enforcement5M-58
      • [F] : Non-U.S. Companies5M-58
        • [F][1] : Additional Calculation Threshold for Non-U.S. Companies5M-58
        • [F][2] : Directors and Executive Officers5M-59
        • [F][3] : Securities Subject to the Trading Restriction5M-59
        • [F][4] : Exempt Transactions5M-59
        • [F][5] : Notice to the SEC5M-59
    • § 5M:4.3 : Discussion of DOL Advance Notice Rule and SOA Section 306(b)5M-59
      • [A] : Text of Department of Labor’s Final Rules, Including Text of Its Model Notice5M-60
      • [B] : Plans and Blackouts Subject to the Advance Notice Rules5M-66
        • [B][1] : Plans Subject to the Notice Rules5M-66
        • [B][2] : Blackout Periods5M-67
        • [B][3] : Exceptions to the Advance Notice Requirement5M-67
        • [B][4] : Waiver of 30 Days’ Advance Notice5M-68
      • [C] : Notice Requirements5M-69
        • [C][1] : Timing of Notice5M-69
        • [C][2] : Contents of Notice to Participants5M-70
        • [C][3] : Notice to Issuer5M-72
        • [C][4] : Regular Participant Communications Can Include Blackout Notice5M-72
        • [C][5] : Model Notice5M-73
      • [D] : Civil Penalties5M-73
Chapter 5N: Loans to Insiders
  • § 5N:1 : Overview5N-2
  • § 5N:2 : Text of Requirements5N-3
    • § 5N:2.1 : Section 4025N-3
    • § 5N:2.2 : Exchange Act Rule 13k-15N-4
  • § 5N:3 : General Principles for Analysis5N-6
    • § 5N:3.1 : Relationship to Historic Margin Interpretation5N-6
    • § 5N:3.2 : Meaning of “In the Form of a Personal Loan”5N-7
    • § 5N:3.3 : Arranging5N-7
  • § 5N:4 : General5N-7
    • § 5N:4.1 : Scope of Prohibition5N-7
    • § 5N:4.2 : Meaning of Issuer5N-8
    • § 5N:4.3 : Applicability to Non-U.S. Companies5N-8
    • § 5N:4.4 : Scope of Covered Executive Officers and Directors5N-8
    • § 5N:4.5 : Grandfather Exemption5N-9
    • § 5N:4.6 : Exemption for Consumer and Related Credits5N-9
      • [A] : Types of Credit Eligible5N-9
        • [A][1] : Consumer Credit5N-9
        • [A][2] : Margin Loans5N-10
        • [A][3] : Loans by FDIC-Insured Banks5N-10
      • [B] : Conditions to Exemption5N-10
    • § 5N:4.7 : Exemption for Non-U.S. Banks—Exchange Act Rule 13k-15N-11
      • [A] : Non-U.S. Banks Eligible for Exemption5N-11
      • [B] : Requirements of Exchange Act Rule 13k-15N-12
        • [B][1] : Condition 1—Home-Country Deposit Insurance or Comprehensive Consolidated Supervision5N-12
        • [B][2] : Condition 2—Insider Lending Restriction5N-13
      • [C] : Disclosure of Insider Loans5N-13
  • § 5N:5 : Common Issues5N-14
    • § 5N:5.1 : Indemnification5N-14
    • § 5N:5.2 : Loan to a Company Controlled by a Director or Executive Officer5N-16
    • § 5N:5.3 : Travel Advance or Provision of Company Credit Card5N-16
    • § 5N:5.4 : Personal Use of Company Car5N-16
    • § 5N:5.5 : Split-Dollar Life Insurance5N-16
    • § 5N:5.6 : Loans from a 401(k) Plan5N-18
    • § 5N:5.7 : “Cashless” Option Exercises5N-19
      • [A] : General Analysis of Cashless Exercise Transactions5N-19
      • [B] : Types of Cashless Exercise Transactions Providing Greatest Comfort5N-21
        • [B][1] : So-Called “T+3” Cashless Exercise Arrangements5N-22
        • [B][2] : Unarranged Cashless Exercise Transactions5N-22
    • § 5N:5.8 : Grandfather Issues5N-23
      • [A] : Commitments and Maintaining Demand Loans5N-23
      • [B] : Permissible Changes to Grandfathered Credits5N-23
  • § 5N:6 : Text of Joint Outline of 25 Law Firms (October 15, 2002)5N-24
Chapter 6A: Corporate Investigations
  • § 6A:1 : Overview6A-2
  • § 6A:2 : Immediate Actions to Take upon Discovery of a Problem6A-2
    • § 6A:2.1 : Ensure Problematic Conduct Has Stopped6A-3
    • § 6A:2.2 : Take Adequate Steps to Preserve Documents and Materials6A-4
      • [A] : Identify Individuals and Systems That May Have Information and Documents Relevant to the Investigation6A-4
      • [B] : Tailor the Scope of Preservation6A-5
      • [C] : Adequately Communicate Preservation Requirements6A-6
  • § 6A:3 : Defining the Problem6A-6
    • § 6A:3.1 : Identify the Substantive Legal Issues the Conduct Raises6A-7
    • § 6A:3.2 : Determine the Relevant Regulatory and Enforcement Authorities6A-7
    • § 6A:3.3 : Determine If the Conduct Affected the Company’s Books and Records or Financial Statements, or Suggests Weakness in Internal Controls6A-8
    • § 6A:3.4 : Determine Who, If Anyone, the Company Needs to Isolate from Participation in the Investigation or Separate from the Company6A-9
    • § 6A:3.5 : Determine Potential Damages and Other Collateral Consequences That Could Flow from the Issue, and When the Company Might Have a Feel for Actual Likely Outcomes6A-10
  • § 6A:4 : Developing a Response6A-11
    • § 6A:4.1 : Determine the Scope of the Investigation6A-11
    • § 6A:4.2 : Determine How the Matter Should Be Escalated Within the Company6A-12
    • § 6A:4.3 : Determine How the Team Working on the Matter Should Be Organized6A-12
    • § 6A:4.4 : Engage with the Relevant Regulatory and Enforcement Authorities6A-13
    • § 6A:4.5 : Determine the Company’s General Public Reporting and Disclosure Obligations6A-15
    • § 6A:4.6 : Determine If the Company Has Unique Reporting Obligations to Enforcement and Regulatory Authorities6A-17
    • § 6A:4.7 : Identify Ongoing Activities of the Company, Such As RFPs, That Need to Be Monitored to Prevent Contagion Risk6A-18
    • § 6A:4.8 : Develop the Company’s Press Strategy6A-18
    • § 6A:4.9 : Develop the Company’s Personnel Strategy6A-18
  • § 6A:5 : Acknowledgment6A-21
Chapter 6B: Employee Whistleblower Protection
  • § 6B:1 : Overview6B-2
  • § 6B:2 : Whistleblower Protections Included in the Sarbanes-Oxley Act6B-3
    • § 6B:2.1 : Text of 18 U.S.C. § 1514A (SOA Section 806, As Amended by the Dodd-Frank Act)6B-3
    • § 6B:2.2 : General Discussion6B-6
    • § 6B:2.3 : Procedure6B-8
    • § 6B:2.4 : What Constitutes Protected Whistleblowing Activity6B-18
      • [A] : Application to Contractors of Public Companies6B-24
    • § 6B:2.5 : Remedies6B-26
    • § 6B:2.6 : Related Criminal Whistleblower Provision (SOA Section 1107)6B-27
      • [A] : Text of SOA Section 11076B-27
      • [B] : Discussion6B-27
  • § 6B:3 : Additional Whistleblower Protections in the Dodd-Frank Act6B-28
    • § 6B:3.1 : Text of Excerpts from Dodd-Frank Act Section 9226B-28
    • § 6B:3.2 : Discussion6B-31
  • § 6B:4 : Whistleblower Incentives Provided by the Dodd-Frank Act6B-35
    • § 6B:4.1 : Statutory Provisions6B-35
    • § 6B:4.2 : SEC and CFTC Regulations Implementing the Whistleblower Program6B-37
  • § 6B:5 : Whistleblower Provisions Included in the Consumer Financial Protection Act of 20106B-43
    • § 6B:5.1 : Text of Dodd-Frank Act Section 10576B-43
    • § 6B:5.2 : Discussion6B-48
  • § 6B:6 : Additional Whistleblower Protections in the 2009 Federal Stimulus Act6B-51
  • § 6B:7 : Considerations for All Affected Employers6B-53
  • § 6B:8 : Procedures to Receive Whistleblower Reports6B-54
  • § 6B:9 : Considerations for Non-U.S. Issuers and Non-U.S. Employees6B-55
  • § 6B:10 : Potential Conflicts Between SOA Whistleblower Provisions and Laws of Non-U.S. Jurisdictions6B-57
    • § 6B:10.1 : EU Data Protection Working Party Opinion6B-58
    • § 6B:10.2 : Discussions Between the EU Data Protection Working Party and the SEC6B-59
Chapter 6C: Attorney Reporting
  • § 6C:1 : Overview6C-3
  • § 6C:2 : Text of Requirements6C-5
    • § 6C:2.1 : Text of SOA Section 3076C-5
    • § 6C:2.2 : Text of 17 C.F.R. Part 2056C-6
  • § 6C:3 : Issuer As Client6C-17
  • § 6C:4 : Key Definitions—To Whom the Rules Apply and the Threshold for an Initial Report6C-17
    • § 6C:4.1 : The Rules Apply to Any “Attorney Appearing or Practicing Before the [SEC] in Any Way in the Representation of an Issuer”6C-17
    • § 6C:4.2 : Defined Terms6C-18
      • [A] : “Attorney”6C-18
      • [B] : “Non-Appearing Foreign Attorney”6C-18
      • [C] : “Appearing and Practicing Before the [SEC]”6C-19
        • [C][1] : Covered Activity6C-19
        • [C][2] : Requirement of Attorney-Client Relationship6C-19
      • [D] : “In the Representation of an Issuer”6C-20
      • [E] : “Issuer”6C-20
        • [E][1] : Covered Issuers6C-20
        • [E][2] : “Foreign Government Issuer”6C-20
    • § 6C:4.3 : Additional Observations Regarding the Scope of the Rules6C-21
      • [A] : Non-Practicing Attorneys and Existence of Attorney-Client Relationship6C-21
      • [B] : Existence of Attorney-Client Relationship As a “Federal Question”6C-21
      • [C] : Eligibility for “Foreign Non-Appearing Attorney” Exemption6C-22
      • [D] : Application to Attorneys Representing Registered Investment Companies6C-23
      • [E] : Application to Broker-Dealers and Other Market Professionals6C-23
      • [F] : Application to Underwriters’ and Other Counterparties’ Counsel6C-24
    • § 6C:4.4 : The Rules Trigger an Attorney’s Reporting Obligations When the Attorney Discovers “Evidence of a Material Violation”6C-24
      • [A] : “Material Violation”6C-24
      • [B] : “Breach of Fiduciary Duty”6C-25
      • [C] : “Similar Violation”6C-25
      • [D] : “Evidence”6C-25
  • § 6C:5 : Up-the-Ladder Reporting, and Exceptions, in the Absence of a “Qualified Legal Compliance Committee”6C-28
    • § 6C:5.1 : Up-the-Ladder Reporting6C-28
      • [A] : Initial Up-the-Ladder Reporting6C-28
      • [B] : CLO’s Duty to Investigate6C-29
      • [C] : Further Up-the-Ladder Reporting6C-29
      • [D] : “Appropriate Response,” “Reasonably” and “Reasonably Believes”6C-29
      • [E] : Satisfaction of Reporting Attorney Obligation6C-31
      • [F] : Failure of Up-the-Ladder Reporting6C-31
      • [G] : Additional Observations Regarding Up-the-Ladder Reporting6C-31
    • § 6C:5.2 : Exceptions for Investigatory and Defense Counsel6C-32
      • [A] : Obligations of Investigatory and Defense Counsel6C-32
      • [B] : “Colorable Defense”6C-33
  • § 6C:6 : Qualified Legal Compliance Committee—Alternative Up-the-Ladder Procedures6C-34
    • § 6C:6.1 : Composition6C-34
    • § 6C:6.2 : Authority and Responsibilities6C-35
    • § 6C:6.3 : Permissive SEC Reporting6C-35
    • § 6C:6.4 : Written Procedures; Committee Resources6C-35
    • § 6C:6.5 : Reporting Obligations of Investigatory and Defense Counsel Retained or Directed by a QLCC6C-36
    • § 6C:6.6 : Implications6C-36
  • § 6C:7 : Disclosure of Issuer Confidences6C-37
    • § 6C:7.1 : Self-Defense6C-37
    • § 6C:7.2 : SEC Reporting6C-37
  • § 6C:8 : Responsibilities of Supervisory and Subordinate Attorneys6C-38
    • § 6C:8.1 : Definition of “Supervisory Attorney” and “Subordinate Attorney”6C-38
    • § 6C:8.2 : Subordinate Attorneys6C-39
    • § 6C:8.3 : Supervisory Attorneys6C-39
    • § 6C:8.4 : Obligations of Mid-Level Attorneys6C-40
  • § 6C:9 : Sanctions, Discipline and Liability6C-40
    • § 6C:9.1 : Penalty Provisions6C-40
    • § 6C:9.2 : Concurrent and Inconsistent Disciplinary Authority Applicable to U.S. and Non-U.S. Attorneys6C-41
    • § 6C:9.3 : No Private Right of Action6C-42
  • § 6C:10 : Whistleblower Protections6C-42
  • § 6C:11 : Implications for Non-U.S. Issuers and Non-U.S. Attorneys6C-43
    • § 6C:11.1 : Matters Relating to Non-U.S. Issuers6C-44
      • [A] : Use of QLCC6C-44
      • [B] : Scope of Covered Activity6C-44
    • § 6C:11.2 : Matters Relating to Non-U.S. Attorneys6C-45
      • [A] : Scope of Application6C-45
      • [B] : Determining Whether Reporting Is Required6C-45
      • [C] : Exemption for Local Law Conflicts6C-46
  • § 6C:12 : Proposals That Would Have Required Attorney Withdrawal and SEC Notification, or “Noisy Withdrawal”6C-46
Appendix A: Cross References of SOA Sections to Discussions in This Book
Appendix B: Cross References of SEC Rules to Discussions in This Book
Appendix C: Comparison of NYSE and Nasdaq Corporate Governance Rules
Appendix D: Text of Sarbanes-Oxley Act of 2002
Appendix E: SEC Compensation-Related Compliance and Disclosure Interpretations
Appendix F: SEC Staff Compliance and Disclosure Interpretations Regarding Form 8-K
Appendix G: SEC Staff Compliance and Disclosure Interpretations Regarding Exchange Act Section 16 and Related Rules and Forms
Appendix H: NYSE Frequently Asked Questions Regarding Corporate Governance Listing Standards
Appendix I: SEC Office of the Chief Accountant Frequently Asked Questions Regarding Application of the Commission’s Rules on Auditor Independence
Appendix J: SEC Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations
Appendix K: Staff Legal Bulletin No. 14-14H
Appendix L: Private Sector Corporate Governance Recommendations and Voting Policies
  Index

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