November 5, 2004

Alan Beller’s Compensation Disclosure Speech Is Up!

Yesterday, the SEC posted Alan Beller’s outstanding speech from our October 20th conference – and if you are involved with proxy disclosures, it is must reading. On, the video archive of Alan delivering the speech is still available, as well as the Q&A afterwards that flushes out some of Alan’s comments.

Right now, we are offering a special catch-up offer to those that missed the conference – this offer includes access to for 2005 at a special reduced rate. This offer expires on December 15th.

SEC Slams Wachovia for Merger Proxy Disclosure Violations

Yesterday, the SEC’s Enforcement Division settled an action with Wachovia in connection with its 2001 merger with First Union. The SEC alleged that Wachovia failed to disclose – in quarterly reports and a joint proxy statement-prospectus – that it had purchased $500 million of First Union stock during the period when there were competing bids for the target.

In levying a $37 million penalty – which is pretty hefty for a disclosure violation – the SEC singled out Wachovia’s lack of cooperation during the SEC’s investigation.

SEC Approves NYSE’s Revised Governance Standards

Yesterday, the SEC approved the NYSE’s revised proposed changes to its governance listing standards. Among other modifications, the amended standards change the independence ‘bright-line’ standard that addresses a director’s relationship with the listed company’s auditor. The look-back provision was modified to impact only individuals who actually worked on the company’s audit while employed by the audit firm – but the standard will now disqualify any director who has an immediate family member who is a current partner at the audit firm. Previously, a director was disqualified only if the immediate family member was with the audit firm in a “professional capacity.”

Since there may be directors who were independent under the previous
standard – but will not be independent under the revised standard – the
rule provides a transition period: companies will have until their first annual meeting after June 30, 2005 to remedy any independence issue resulting from this change. If a director’s independence status changes, the company must file an Interim Written Affirmation promptly – utilizing the transition period will not mean that a company is out of compliance, but the company must indicate reliance on the transition period on Exhibit A or E, as appropriate.

We have begun posting law firm memos related to these changes in Section D.13 of our Sarbanes-Oxley Law Firm Memos.