On June 20, 2012, the U.S. Securities and Exchange Commission (the “SEC”) adopted rules to implement the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) that affect the composition of compensation committees, the use of compensation advisers by companies listed on national securities exchanges, and disclosure provided by companies regarding their use of compensation consultants. Under the rules as adopted, the national securities exchanges are directed to adopt listing standards regarding the independence of the members of the compensation committee, as well as the independence of advisers engaged by the compensation committee. Moreover, the rules require additional disclosure under Item 407 of Regulation S-K regarding any conflicts of interest raised by the work of compensation consultants.

OVERVIEW

Section 952 of the Dodd-Frank Act added Section 10C to the Securities Exchange Act of 1934 (the “Exchange Act”). Section 10C requires that the SEC direct the national securities exchanges and associations to prohibit the listing of any company issuing equity securities, subject to limited exceptions, unless specific conditions are satisfied with respect to the authority of the compensation committee, the independence of the members of the compensation committee, and the consideration of specific factors relating to the independence of compensation advisers (consultants, legal counsel and other advisers) retained by the compensation committee.

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