Sec rules backdating stock options who do you report online dating scams to

13 Aug

New "Compensation Discussion and Analysis" Section Required An entirely new disclosure section called "Compensation Discussion and Analysis" ("CD&A") will be required.

The CD&A is substantially different from its counterpart under the current rules, the "Compensation Committee Report." The CD&A is intended to put in perspective for investors the policies and decisions that led to the compensation decisions reflected in the tables and narrative disclosures set forth throughout the proxy statement.

The stock plans of many public companies prohibit the granting of below-market options; other companies disclose in their SEC reports that stock options are granted at market and prepare their financial statements on that basis.

The term “backdating” refers to a number of option granting practices in which the reported grant date is different from the date on which the option is actually awarded, resulting in an option that is already “in-the-money” at the time of the grant.

The practice of “backdating” stock option grants has recently captured the attention of regulators, prosecutors, the plaintiffs’ bar, shareholders and the media.

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The following presents a brief summary of the Rules.

In its most basic form, backdating can range from the blatant falsification of a document to take advantage of a lower stock price to allowing executives to select a grant date during a specified period, for example during the 30 days after the grant is approved by the board or committee.

Although these practices involve different types of conduct, both create problems because the date when the exercise price is set is not the same as the date on which the option is awarded.

The Rules generally are effective for Forms 10-K and proxy statements filed for fiscal years ending on or after December 15, 2006, and thus will apply to disclosures of 2006 compensation in calendar year companies' 2007 proxy statements.

The Rules also require precise and detailed disclosures of stock option grants.