Corporate And Financial Weekly Digest - December 18, 2009

Edited by Robert Kohl and Hays Ellisen


SEC Issues Final Rules to Enhance Disclosure Regarding Corporate Governance and Clarify Proxy Rules

On December 16, the Securities and Exchange Commission adopted final rules intended to improve disclosure in the area of corporate governance and clarify the SEC's proxy rules.

The new rules, which are effective February 28, 2010, require issuers to disclose in their proxy statements (i) the impact of overall compensation policies and practices applicable to all employees on risk-taking that is reasonably likely to have a material adverse effect on the issuer; (ii) information concerning the qualifications, experience, skills and other attributes that qualify directors and nominees to serve on the board; (iii) whether, and if so, how, the nominating committee considers diversity when identifying nominees for director, (iv) the role of the board of directors in risk management; (v) the rationale for the issuer's corporate leadership structure; and (vi) fees paid to compensation consultants who advise both the board of directors and management under certain circumstances.

More specifically, the amended rules revise the disclosure of stock options and awards in the Summary Compensation Table and Director Compensation Table to require reporting of the aggregate grant date fair value of awards rather than current disclosure of the dollar amount of compensation recognized in that year for financial statement reporting purposes. In addition, issuers will be required to disclose whether and why they have chosen to combine or separate the chief executive officer and board chair positions.

The final rules also accelerate disclosure of election results by requiring issuers to disclose voting results in a current report on Form 8-K filed with the SEC within four days after the shareholder vote rather than in its Form 10-Q for that quarter.

A more detailed analysis of the Final Rules will be distributed in a Katten Client Advisory next week.

Click here ( for the press release issued by the Securities and Exchange Commission.

Click here ( for the Final Rule Release 33-9089.

SEC Re-Opens Public Comment Period for Shareholder Director Nomination Proposal

On December 14, the Securities and Exchange Commission announced in a rule-making notice that it is re-opening the public comment period for its shareholder director nomination proposal in an effort to solicit views on additional data and analyses received by the Commission at or after the end of the original public comment period, which was August 17. The Commission has received more than 500 comments on the proxy access rule. Comments are due no later than 30 days after the publication of the Commission's release in the Federal Register.

As previously reported in the May 22 ( and June 12 ( editions of Corporate and Financial Weekly Digest and a June 18 Client Advisory (, the Commission proposed changes to the federal proxy rules to facilitate the exercise of shareholders' rights under state corporate law to nominate and elect directors. The SEC staff expects to make a final recommendation to the Commission in early 2010.

Click here ( for the SEC release.

Click here ( for the Proposed Rule Release No. 33-9086.

SEC Announces Effective Date for Filing Fee Increases

On December 17, the Securities and Exchange Commission announced the effective dates for previously disclosed adjustments to fee rates for registration of securities, securities repurchases in going private transactions, proxy solicitations and transactions on exchanges and certain over-the-counter markets. The SEC's announcement came in connection with the December 16 enactment of the congressional appropriations bill including funding for the SEC.

As reported in the May 8 (, October 2 ( and November 6...

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