Final Executive Pay Proposals Adopted by the SEC

SEC commissioners met on July 26, 2006, to approve, in a 5-0 vote, the proposed comprehensive new rules relating to disclosure of executive compensation. The proposed rules, released in January, received more comments than any other proposal in the SEC’s history. The new rules will become effective for the 2007 annual meeting season.

The final rules were adopted largely as proposed with the following significant exceptions:

• Given the recent attention to stock option timing issues, the SEC’s new rules will require companies to explain their option grant practices and, in particular, whether option grants are specifically timed to the public release of company information and the circumstances involving grants where the exercise price does not match the market value of the stock on the date of grant.