Disclosure of Executive Compensation: Summary of Executive Compensation Tables

Employee Benefits Alert
10.17.06

The New SEC Executive Compensation Disclosure Rules:   Complying with the Latest Corporate Governance Standards

On July 26, 2005, the SEC adopted significant changes to a public company’s disclosure requirements with respect to executive compensation. Among the changes include a reorganization of the tables detailing executive compensation and new requirements to provide narrative detail regarding the various compensatory arrangements. This outline is intended to provide an overview of the new tabular disclosure requirements.

Summary of Executive Compensation Tables

I. OVERVIEW

A. Consistent Themes of New Requirements:

1. Disclose of all items of compensation. Want to avoid manipulation.

2. Desire to have all compensation valued and quantified.

3. Reliance on FAS 123R.

B. Required Sections/Tables:

1. Summary Compensation Table.

2. Grants of Plan-Based Award Table (combination of the two supplemental tables described in the proposed changes).

3. Outstanding Equity Awards at Fiscal Year End Table.

4. Option Exercises and Stock Vested Table.

5. Pension Benefits Table.

6. Nonqualified Deferred Compensation Table.

7. Post-Employment Payments (Narrative).

8. Director Compensation Table.

C. Effective Dates:

1. Proxy statements and annual reports filed on or after December 15, 2006 for fiscal years ending on or after December 15, 2006. Separate rules apply for investment companies.

2. Registration statements filed on or after December 15, 2006 that are required to include Item 402 information for fiscal years ending on or after December 15, 2006.

II. IDENTIFYING THE NAMED EXECUTIVE OFFICERS

A. Named Executive Officers Now Includes:

1. Any individual serving as the company’s “principal executive officer” or similar capacity (the “CEO”), regardless of compensation level, during the last completed fiscal year;

2. Any individual serving as the company’s “principal financial officer” or similar capacity (the “CFO”), regardless of compensation level during the last completed fiscal year;

3. The company’s three most highly compensated executive officers, other than the principal executive and financial officers, during the last completed fiscal year; and

4. Up to two additional individuals for whom disclosure would have been provided (because they would have been one of the most highly compensated officers for the year) but for the fact that they were not employed as of the end of the fiscal year.

5. “Katie Couric Rule” remains in proposed form with uncertain future. Rule as proposed would have required disclosure of additional 3 highest compensated employees who are not executive officers but who have a nexus to management.

Prior rules provided for CEO and 4 highest compensated (plus two that would have been named if they remained employed until the end of the fiscal year).

B. Highest Compensation:

1. Based on total compensation for the last completed fiscal year (the total compensation figure that would be provided in the Summary Compensation Table) excluding increases in pension benefits and earnings on nonqualified deferred compensation (those amounts listed in box (h)). Prior rules would have included only salary and bonus.

2. Exclude any officer (other than CEO or CFO) with compensation less than $100,000.

3. Final rule eliminates the exclusion for compensation “that is not recurring and unlikely to continue” due to SEC concerns that such rule would lead to manipulation or inadequate disclosure. Final rule does permit exclusion of certain compensation paid to overseas executive officers.

4. If CEO or CFO was employed in a different position during last fiscal year, include all compensation for that year.

C. Expected Impact:

1. Using “total compensation” will make it more difficult to determine named executive officers in advance.

2. Likely more changes in named executive officer composition from year to year.

3. Unintended consequence--Impact on 162(m) compliance.

III. SUMMARY COMPENSATION TABLE

A. Overview-Terms-Concepts

1. Table now includes a “total compensation” column reflecting total of all other compensation listed in the table for the executive.

2. Reflects compensation for the most recently completed fiscal year and the two prior years. In 2007, however, only the last year’s compensation must be disclosed. In 2008, only the two prior completed fiscal years must be disclosed. In 2009, all three years must be disclosed.

3. Summary Compensation Table no longer separates annual and long-term compensation.

4. All columns must reflect any amounts deferred for any reason. Under the prior rules, only the salary and bonus columns were required to reflect deferrals made by reason of the executive’s election.

5. New Terms:

a. “Incentive Plan:” means any compensation plan intended to serve as incentive for performance over a specified period, whether measured by reference to financial performance of company, stock price, or other performance measure. Entitlement to payment under an incentive plan must be substantially uncertain at the time the target is set.

b. “Equity Incentive Plan:” An incentive plan that provides awards that fall within scope of FAS 123R because the awards generally provide for share-based payment.

c. “Non-Equity Incentive Plan:” An incentive plan that does not provide for payment based on the value of the company’s stock or that may be settled in company stock. These arrangements do not fall within the scope of FAS 123R.

6. Narrative text concerning compensation described in the Summary Compensation Table is required following the Grant of Plan-Based Awards Table as described in IV.G. below.

Summary Compensation Table

Name and principal position
Year
Salary
($)
Bonus
($)
Stock awards
($)
Option
awards
($)
Non-equity incentive plan compensation
($)
Change in pension value and non-qualified deferred compensation earnings
($)
All other compensation
($)
Total
($)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
PEO
 
 
 
 
 
 
 
 
 
PFO
 
 
 
 
 
 
 
 
 
A
 
 
 
 
 
 
 
 
 
B
 
 
 
 
 
 
 
 
 
C
 
 
 
 
 
 
 
 
 

 

 

 

 

 

 

 

 

 

 B. Salary and Bonus (Columns (c) and (d)).

1. Preambles describe difference between a “bonus” and “non-equity incentive compensation” on page 53178 of the federal register release. An award under a “non-equity incentive plan” is intended to serve as an incentive for performance to occur over a specified period “if the outcome with respect to the relevant performance target is established and the target is communicated to the executive.” A “bonus” is a cash award based on the “satisfaction of a performance target that was not pre-established and communicated, or the outcome of which is not substantially uncertain.”

2. If salary or bonus earned in a given year is not calculable through latest practical date, footnote issue. When amount is calculable, item must be reported on Form 8-K.

3. Include any salary or bonus forgone at the election of the executive under which the executive received, in place of such salary or bonus, stock, equity-based or other forms of non-cash compensation. Any non-cash compensation received in place of salary or bonus must be disclosed in a footnote referencing the compensation and, where applicable, the Grant of Plan-Based Awards Table where the compensation is reported.

4. As noted above, columns should reflect amounts deferred.

C. Stock & Option Awards (Columns (e) and (f))

1. Stock awards include stock-related awards that derive their value from company stock or permit settlement in company stock, and are therefore within the scope of FAS 123R. Examples include restricted stock, restricted stock units, phantom stock or phantom stock units, common stock equivalents, or other similar instruments that do not have option-like features.

2. Option awards include stock appreciation rights and other similar equity-based compensation instruments that have option-like features.

3. For an award of stock or options, only show the dollar amount recognized for financial statement reporting purposes under FAS 123R. This value should disregard the estimate of forfeitures related to service-based vesting conditions. Report awards regardless of whether or not they were issued under an equity incentive plan. Reporting in columns (e) and (f) is not dependent on whether the arrangement constituted an “incentive plan.” Prior to the December 2006 amendment, the rules required that the SCT reflect the full grant date fair value.

4. Provide a footnote describing all forfeitures during the year and disclosing all assumptions made in the valuation. If appropriate, disclose assumptions made in the valuation by reference to a discussion of those assumptions in the registrants financial statements, footnotes to the financial statements, or MD&A.

D. Non-Equity Incentive Plan Compensation (Column (g))

1. Unlike reporting in columns (e) and (f) for equity-based awards, report amounts in year award is earned not the year of grant. Report amounts earned even if payment is not made in that year (whether deferred or otherwise). The “Grant of Plan-Based Awards Table” will reflect the grant of awards.

2. Reflect any earnings on any awards that were earned.

E. Change in Pension Value and Nonqualified Deferred Compensation Earnings Column (column (h))

1. Figure reported reflects the sum of increase in the pension value and the deferred compensation earnings.

2. Increase in pension value, stated in present value, includes any increases in both tax-qualified pension plans and non-qualified supplemental pension or retirement income replacement arrangements. The total increase in the pension value includes both the increase in the present value due to the passage of time and the increase due to additional service or compensation. Assumptions and methodology must be footnoted.

3. Earnings on deferred compensation should be reported only if in excess of 120% of the long-term federal rate. Note that total earnings will need to be reported in the Nonqualified Deferred Compensation Table (regardless of whether the rate is considered above-market or not). Employer provided credits under a deferred compensation plan, whether matching or discretionary, will be reflected in “Other Compensation” column, not as earnings in this column, although earnings on such matching or employer credits are covered by this column (h).

F. Other Compensation (column (i)). Intended to capture all other compensation and to avoid any manipulation in structuring compensation to avoid disclosure. Includes all other compensation regardless of amount, including:

1. Value of any tax “gross-up” payment.

2. Any discount on any company security (unless provided to all security holders or salaried employees).

3. Amount paid or accrued (having become due) to an executive in connection with the executive’s termination of employment or change in control.

4. Company credits under a defined contribution plan.

5. Dollar value of insurance premiums paid by company.

6. Dollar value of dividends or earnings paid on stock or option awards if such amounts were not taken into account in determining the “fair value” of such awards in column (l) of the Grants of Plan-Based Awards Table.

7. Prerequisites if aggregate value of all perks for an executive exceeds $10,000. Prior rule only required perks to be disclosed if total value exceeded lesser of $50,000 or 10% of total executive compensation.

a. Each perk must be identified. Prior rule only required identification of perks with a value in excess of 25% of all perks. Perks must be described with sufficient detail (generally, greater detail than what is required today).

b. Each perk with a value that exceeds the greater of $25,000 or 10% of all perks for that executive must be quantified and disclosed in a footnote. This requirement only applies to perks in the last fiscal year.

c. Perks are valued for reporting purposes on their aggregate incremental cost to the company. Valuation method is different than the method used for tax purposes.

d. The SEC’s preamble to the new rules states that an item is not a perk or personal benefit if it is integrally and directly related to the performance of the executive’s duties. Otherwise, an item is a perk or personal benefit if it confers a direct or indirect benefit that has a personal aspect, without regard to whether it may be provided for some business reason or for the convenience of the company, unless it is generally available on a non-discriminatory basis to all employees.

G. Total Compensation (Column (j)): Figure should reflect sum of lines (b) through (i).

IV. SUPPLEMENTAL GRANTS OF PLAN-BASED AWARDS TABLE

A. Overview-Terms-Concepts

1. Intended to supplement Summary Compensation Table and provide more detail with respect to awards provided in Summary Compensation Table.

2. Also intended to identify (spotlight) company policies regarding option dating and pricing.

3. Each award would generally be provided with its own row. If grants were provided under different plans, the various plans should be identified by footnote. A tandem grant of two instruments, only one of which is under an incentive plan, should only be reported in (i) or (j), as applicable, with a footnote describing the tandem grant.

4. The term “threshold” in columns (c) and (f) refers to the minimum amount payable for a certain level of performance under the plan.

5. The term “target” in columns (d) and (g) refers to the amount payable if the specified performance targets are reached. If award provides for only one level of payout, the amount should be reported as a target. If the target amount is not determinable, provide a representative amount based on the prior fiscal year’s performance.

6. The term “maximum” in columns (e) and (h) refers to the maximum payout possible under the plan.

7. Narrative text concerning compensation described in the Summary Compensation Table is required following the Grant of Plan-Based Awards Table.

Grants of Plan Based Awards 







Name



(a)






Grant
Date


(b)
Estimated future payouts under
non-equity incentive plan awards
Estimated future payouts under
equity incentive plan awards
All other stock awards; Number of shares of stock or units
(#)
(i)
All other option awards; Number of securities underlying options
(#)

(j)

Exercise or base price of option awards
($/Sh)



(k)

Grant date fair value of stock and option awards

 
(l)




Threshold
($)


(c)




Target
($)


(d)




Maximum
($)


(e)




Threshold
(#)


(f)




Target
(#)


(g)




Maximum
(#)


(h)
PEO
 
 
 
 
 
 
 
 
 
 
 
PFO
 
 
 
 
 
 
 
 
 
 
 
A
 
 
 
 
 
 
 
 
 
 
 
B
 
 
 
 
 
 
 
 
 
 
 
C
 
 
 
 
 
 
 
 
 
 
 

 

 

 

 

 

 

 

 

 

 

 

B.Table Instructions:

1. Grant Date (column (b)). Enter grant date for equity-based awards (as determined for FAS 123R purposes). If the grant date is other than the date on which the compensation committee (or other board committee) took action (or is deemed to have taken action), add a separate column and report the date of the committee or board action.

2. Threshold, Target, and Maximum for Non-Equity Incentive Awards (columns (c) through (e)). Report dollar value of estimated future payout of awards or range of possible payouts. If such a plan uses units or other rights, create a new column quantifying the rights awarded.

3. Threshold, Target, and Maximum for Equity Incentive Awards (columns (f) through (h). These columns only address equity awards under “incentive plans” as defined above. Report number of shares of stock or shares underlying options to be paid our or vested upon satisfaction of the conditions in question or the range of possible payouts.

4. Non-Incentive Stock and Option Awards. Identify any awards that are not part of an incentive plan columns (i) and (j)).

5. Identify the per-share exercise or base price of the options granted in the fiscal year (column k). If the exercise or base price is less than the closing market price on the date of grant, provide a separate adjoining column showing the closing market price on the date of grant and provide a narrative describing the methodology for determining the exercise or base price either by a footnote or accompanying textual reference.

6. Column (l) requires the grant date fair value of each equity award computed in accordance with FAS 123R. If options were repriced during last fiscal year, whether through amendment, replacement or any other means, or were otherwise materially modified, report the incremental fair value determined under FAS 123R, computed as of the modification date.

C. Narrative: The rules require a narrative description of any material factors necessary to understanding the information disclosed in either the Summary Compensation Table or the Grants of Plan-Based Awards Table. Examples of such factors include:

1. Material terms of each executive’s employment agreement,

2. Whether any outstanding option or other equity-based award was repriced or materially modified (including an extension of the option period).

3. Material terms of any award listed in the Grants of Plan-Based Awards, including a description of the formula or criteria to be applied in determining the amounts payable and the vesting schedule including whether dividends are payable on stock and the applicable performance conditions.

4. An explanation of the amount of salary and bonus in proportion to total compensation.

V. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

A. Overview-Terms-Concepts:

1. Table requires grant by grant description of each award, requiring separate line entries for multiple awards. Multiple awards may be aggregated if the expiation date and the exercise price are identical.

2. This table, plus the Option Exercises and Stock Vested Table replace the “Aggregated Option/SAR Exercises” and the “Fiscal Year End Options/SAR Values” tables required under the prior rules.

3. Identify by footnote whether an award has been transferred other than for value.

4. Vesting dates for each award of options, shares of stock, and equity incentive plan awards held at fiscal-year end must be disclosed by footnote.

Outstanding Equity Awards at Fiscal Year-End

 
Option awards
Stock awards

Name

(a)
Number of securities underlying unexercised options
(#)
Exercisable

(b)
Number of securities underlying unexercised options
(#)
Unexercisable

(c)
Equity incentive plan awards: Number of securities underlying unexercised unearned options
(#)

(d)
Option exercise price
($)

(e)
Option expiration date


(f)
Number of shares of units of stock that have not vested
(#)

(g)
Market value of shares of units of stock that have not vested
($)

(h)
Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested
(#)

(i)
Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested
($)

(j)
PEO
 
 
 
 
 
 
 
 
 
PFO
 
 
 
 
 
 
 
 
 
A
 
 
 
 
 
 
 
 
 
B
 
 
 
 
 
 
 
 
 
C
 
 
 
 
 
 
 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B. Table Instructions:

1. Provide in columns (b) and (c), as applicable, the number of shares underlying unexercised options that are exercisable and unexercisable but excluding any option awards pursuant to an equity incentive plan (which are described in column (d)). Once an award described in column (c) becomes exercisable, its shares should be reported in column (b).

2. Provide in column (d) the number of shares underlying the award of options granted under an equity incentive plan award but that have not been earned. This column should reflect the awards under an equity incentive plan where the performance condition has not yet been satisfied. The number of shares reported in column (d) should be based on achieving threshold performance goals, except if the threshold performance goals have already been achieved in prior fiscal year, such number shall be based on reaching the target or maximum performance goals. Once the performance condition is satisfied, the shares underlying the award should be reflected in column (b) if vested or (c) if the options remain unvested.

3. Columns (e) and (f) should reflect the exercise price and expiration date.

4. Column (g) should reflect the number of shares of unvested stock awards outside of those granted under an equity incentive plan, and column (h) should reflect the market value of those shares. The market value should be determined by multiplying the number in column (g) by the closing market price of company stock at the end of the last completed fiscal year.

5. Column (i) should reflect the number of shares of unvested stock awards under an equity incentive plan, and column (j) should reflect the market value of those shares. The market value should be determined by multiplying the number in column (i) by the closing market price of company stock at the end of the last completed fiscal year.

VI. OPTION EXERCISES AND STOCK VESTED TABLE

Option Exercises and Stock Vested

 
Option awards
Stock awards

Name
Number of shares acquired on exercise
(#)
Value realized on exercise
($)
Number of shares acquired on vesting
(#)
Value realized
on vesting
($)

(a)
(b)
(c)
(d)
(e)
PEO
 
 
 
 
PEO
 
 
 
 
A
 
 
 
 
B
 
 
 
 
C
 
 
 
 


A. In columns (b) and (c), enter in number of shares acquired upon exercise and the value realized upon exercise. The value realized is the aggregate dollar value on the date of exercise of the number of shares underlying the options exercised reduced by the aggregate exercise price. Do not include the value of any other payments even if related to the option (such payments should be reported as “Other Compensation” in the Summary Compensation Table.

B. In columns (d) and (e), report the number of shares acquired upon vesting and the total dollar value of the shares acquired upon vesting on the date of vesting. If any shares are deferred, report the deferred shares with a footnote reflecting the terms of the deferral.

VII. PENSION BENEFITS TABLE

A. Overview-Terms-Concepts.

1. Table should reflect each plan that provides for payments or benefits primarily following retirement, including, but not limited to, tax-qualified defined benefit plans and supplemental executive retirement plans but excluding qualified and nonqualified defined contribution plans.

2. Each plan under which an executive accrued a benefit should be disclosed in a separate row.

3. Table designed to disclose retirement benefits that may have otherwise been “hidden.”

4. Table replaces the already existing pension table.

 

Name


(a)

Plan name


(b)
Number of years of credited service
(#)

(c)
Present value of accumulated benefit
($)

(d)
Payments during last fiscal year
($)

(e)
PEO
 
 
 
 
PEO
 
 
 
 
A
 
 
 
 
B
 
 
 
 
C
 
 
 
 

 B. Table Instructions:

1. In columns (b) and (c), report the plan name and the number of years of service credited to the executive under the plan. If the number of years of service credited for an executive differs from the executive’s actual years of service, include in a footnote a discussion of the difference and the impact on the executive’s benefit.

2. Line (d) should reflect the present value (the lump sum value, regardless of whether this form is available to the executive) of the executive’s accumulated benefit under the plan.

a. Value should be computed as of the same pension plan measurement date used for determining the liability on the company’s audited financial statements for the last completed fiscal year.

b. Value should be based on same assumptions (interest rate, etc.) used for determining liability on the company’s financial statements.

c. The value should assume that the retirement age is the normal retirement age as defined in the plan or, if not so defined, at the time when the participant can elect to receive an unreduced benefit.

d. Estimates should be based on current compensation and future levels of compensation should not be estimated for the calculation.

e. In separating benefit under tax-qualified defined benefit plan from any supplemental plan, company should apply IRS limitations in effect as of the measurement date.

3. In column (e), report value of any benefits paid under any retirement plan during the year to the executive.

C. Narrative Description: Following table, include a narrative description of the various pension arrangements, including the following factors:

1. The material terms and conditions of payments and benefits available under the plan including the plan’s normal retirement payment and benefit formula and eligibility standards.

2. The effect of the form of benefit elected by the executive on the amount of annual benefit.

3. If any named executive officer is currently eligible for early retirement under any plan, identify that named executive officer and the plan, and describe the plan’s early retirement payment and benefit formula and eligibility standards.

4. The specific elements of compensation included in applying the payment and benefit formula.

5. If the named executive officer participates in more than one plan, explain the purposes of the different plans.

6. Any company policies with respect to granting extra years of credited service.

VIII. NONQUALIFIED DEFERRED COMPENSATION (DEFINED CONTRIBUTION)

A. Overview-Terms-Concepts.

1. Table applies to only defined contribution-type non-qualified plans. Unlike Pension Benefits Table, the Nonqualified Deferred Compensation Table excludes tax-qualified plans.

2. New table is designed to show value of deferred compensation and how such compensation grows prior to payment.

3. Summary Compensation Table only reflects above-market earnings. This table will reflect all earnings.

4. Companies will need to determine what is a “nonqualified deferred compensation plan.” The current definition under Code section 409A is quite broad.

Nonqualified Deferred Compensation

 


Name


(a)
Executive contributions
in last FY
($)

(b)
Registrant contributions in last FY
($)

(c)
Aggregate earnings
in last FY
($)

(d)
Aggregate withdrawals/
distributions
($)

(e)
Aggregate balance
at last FYE
($)

(f)
PEO
 
 
 
 
 
PFO
 
 
 
 
 
A
 
 
 
 
 
B
 
 
 
 
 
C
 
 
 
 
 

B. Instructions:

1. In columns (b) and (c), enter dollar value of aggregate executive and company contributions during last fiscal year. Footnote the extent to which any contributions were also reported in the Summary Compensation Table.

2. In column (d), report dollar value of aggregate interest or other earnings accrued during last fiscal year. Footnote the extent to which any contributions were also reported in the Summary Compensation Table.

3. In column (e), reflect the total withdrawals and distributions to the executive during the last fiscal year.

4. Column (f) should reflect the account balance at the end of the last fiscal year. Footnote the extent to which amounts reported in this column were previously reported as compensation in the Summary Compensation Tables for prior years.

C. Narrative: Following table, include a narrative description of each plan, including the following factors:

1. Types of compensation permitted to be deferred under each plan.

2. Measures for calculating interest and other plan earnings including whether measures are selected by the executive or registrant and the frequency and manner in which selections may be changed, quantifying interest rates and other earnings measure applicable during the company’s last fiscal year. The preambles describe that where plan earnings are calculated by reference to actual earnings of mutual funds or other securities, it is sufficient to identify the reference security and quantify its return.

3. Material terms with respect to payouts, withdrawals, and distributions.

IX. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL.

A. Identify. Each contract or agreement, whether written or unwritten, that provides for payment to a named executive officer upon termination of employment or change in control.

B. Material Factors. For each such agreement, disclose the following:

1. The specific circumstances that would trigger payment or benefits (including perks).

2. Describe and quantify estimated payments and benefits under each circumstance and how the payments are calculated.

3. The material conditions applicable to receipt of payments including such conditions as the requirement to execute non-compete or waiver.

4. Any other material factors.

C. Assumptions.

1. Estimated benefits under the agreements must assume that triggering event took place as of last day of last fiscal year. If payments are uncertain, must estimate and disclose assumptions in estimate.

2. Perks must be included (unless aggregate value does not exceed $10,000). Perks with value exceeding $10,000 must have value disclosed.

3. If any benefits are provided and already disclosed under the Pension Benefits Table or Nonqualified Deferred Compensation Table, refer to the tables. However, disclose whether any such benefits become vested or enhanced upon a triggering event.

X. DIRECTOR COMPENSATION TABLE

A. Overview-Terms-Concepts.

1. Directors who are also named executive officers do not need to be listed if the director’s compensation is already listed in the Summary Compensation Table.

2. Although similar to the Summary Compensation Table, the director’s table only provides information for the last fiscal year.

3. Directors can be grouped in a row if all compensation for each director is the same.

Director Compensation




Name




(a)
Fees earned or paid in cash
($)



(b)


Stock
awards
($)



(c)


Option
Awards
($)



(d)

Non-equity incentive plan compensation
($)



(e)
Change in pension value and nonqualified deferred compensation earnings


(f)


All other compensation
($)



(g)



Total
($)



(h)
A
 
 
 
 
 
 
 
B
 
 
 
 
 
 
 
C
 
 
 
 
 
 
 
D
 
 
 
 
 
 
 
E
 
 
 
 
 
 
 

B. Instructions.

1. Columns (b) should reflect the cash awarded to directors.

2. For awards of stock, column (c) should reflect the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year in accordance with FAS 123R. For awards of options, column (d) should reflect the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year in accordance with FAS 123R. For columns (c) and (d), report any adjustments or repricing in a manner similar to the disclosure described in the Grants of Plan-Based Awards Table.

3. Column (e) should reflect any earnings under a non-equity incentive plan during the fiscal year.

4. Column (f) should reflect the change in pension value and above-market nonqualified deferred compensation earnings. The manner for determining these amounts is described above concerning the Summary Compensation Table.

5. Column (g) should reflect all other compensation determined in the same manner as the Summary Compensation Table, provided that this column should also include:

a. consulting fees.

b. annual costs of payments and promises of payments pursuant to director legacy programs and similar charitable award programs.

C. Narrative: Following the table, include a narrative description of any material factors necessary to understand director compensation, including:

1. Standard compensation arrangements for directors (retainer fees, meeting and other fees).

2. Whether any director has a different compensation package.

This advisory is published by Miller & Chevalier Chartered (www.milchev.com) to provide a summary of significant developments to our clients and friends. It is intended to be informational and does not constitute legal advice regarding any specific situation. This material may also be considered advertising under applicable court rules.

For additional information, please contact any of the following lawyers:

Jeanette Dayan, jdayan@milchev.com, 202-626-6037

Elizabeth F. Drake, edrake@milchev.com, 202-626-5838

Marianna G. Dyson, mdyson@milchev.com, 202-626-5867

Michael M. Lloyd, mlloyd@milchev.com, 202-626-1589

C. Frederick Oliphant, foliphant@milchev.com, 202-626-5834

Anthony G. Provenzano, aprovenzano@milchev.com, 202-626-1463

Gary G. Quintiere, gquintiere@milchev.com, 202-626-1491

Lee H. Spence, lspence@milchev.com, 202-626-5965

Adrian L. Morchower

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