"Planning for the 2012 Annual Meeting and Reporting Season"

Skadden, Arps, Slate, Meagher & Flom LLP

As companies prepare for the 2012 annual meeting and reporting season, we have compiled an overview of the corporate governance and disclosure matters that companies should consider as they draft this season’s disclosure materials. Some of these matters are requirements of the new Dodd-Frank Act rules and others are based on lessons gleaned from the 2011 annual meeting and reporting season. The items included in the checklist below will not apply equally to all companies. Whether a particular item applies and how a company should address it will depend on, among other things, the company’s 2011 voting results, executive compensation plans and programs and shareholder base.

- Ensure compliance with new say-on-pay provisions. The Securities and Exchange Commission (SEC) adopted rules last year, as dictated by the Dodd-Frank Act, that require all U.S. public companies to give their shareholders a nonbinding vote on the company’s executive compensation disclosure at least once every three years. All companies, other than smaller reporting companies,1 were required to hold an initial say-on-pay vote in 2011. Depending on the company’s decision on the frequency of say-on-pay votes, that vote should be included on the ballot again in 2012.

Companies also will need to include new disclosures in the Compensation Disclosure and Analysis section of their proxy statements to discuss “[w]hether and, if so, how the registrant has considered the results of the most recent shareholder advisory vote on executive compensation required by [the SEC’s proxy rules] in determining compensation policies and decisions and, if so, how that consideration has affected the registrant’s executive compensation decisions and policies.” The SEC has not provided any guidance on the type of disclosures it expects to see in response to this new requirement. The disclosures included in the 2011 proxy statements of companies that received funds from the Troubled Asset Recovery Program (TARP), may be instructive, as those companies were required to include this disclosure last season. Otherwise, companies will need to consider how best to respond to this new disclosure requirement and to address shareholder views on compensation decisions generally based on, among other things, the results of the say-on pay vote and the voting guidelines of the major proxy advisory firms and institutional investors.

Please see full memorandum below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Skadden, Arps, Slate, Meagher & Flom LLP

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