June 9, 2003

AUDIT COMMITTEE FINANCIAL EXPERT Richard F. Langan, Jr.

In this issue: • Audit Committee Financial Expert • Should You Accept That Invitation to Join the Board of Directors? • Update: SarbanesOxley Act of 2002 and Related Regulations Implementation Dates

As mandated in Section 407 of the Sarbanes-Oxley Act of 2002, the SEC adopted rules and amendments requiring each Securities and Exchange Commission reporting company to disclose whether it has at least one “audit committee financial expert” serving on its audit committee and, if so, the name of the expert and whether the expert is independent of management. The rules and amendments do not require a reporting company to have an audit committee financial expert. A reporting company that does not have an audit committee financial expert must disclose that it does not and explain why it does not. SEC reporting companies, other than small business issuers, must comply with the audit committee financial expert disclosure requirements in their annual reports for fiscal years ending on or after July 15, 2003. Small business issuers must comply with the disclosure requirements for fiscal years ending on or after December 15, 2003.

Required Disclosure Under the SEC rules implementing Section 407 of the Sarbanes-Oxley Act, each reporting company will be required to disclose in its annual report filed pursuant to the Securities Exchange Act of 1934: •

The determination by its board of directors as to whether the company either has or does not have at least one audit committee financial expert serving on its audit committee, and if it does not have such an expert, why not;

•

If its board of directors determines that it has one or more audit committee financial experts, the name of at least one of the experts; and

•

Whether the audit committee financial expert is independent of management under the independence standards of the New York Stock Exchange, American Stock Exchange or Nasdaq, as appropriate.

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Corporate Responsibility Alert

A publication of Nixon Peabody LLP

In determining whether the audit committee financial expert is independent of management, companies with securities listed on the NYSE, Amex or Nasdaq should utilize the independence standards of the self-regulatory organization on which its securities are listed. Companies that do not have securities listed on the NYSE, Amex or Nasdaq will be required to utilize the independence standards of one of those three self-regulatory organizations applied on a consistent basis in making the independence determination. A reporting company will not satisfy the disclosure obligation by stating that it decided not to make a determination as to whether or not it has an audit committee financial expert, or by simply disclosing the qualifications of all its audit committee members. Moreover, if the board of directors determines that at least one member of the audit committee qualifies as an audit committee financial expert, the company may not disclose that it does not have an audit committee financial expert.

Audit Committee Financial Expert To qualify as an audit committee financial expert, an audit committee member must have each of the following five attributes: •

An understanding of generally accepted accounting principles and financial statements;

•

The ability to assess the general application of generally accepted accounting principles in connection with the accounting for estimates, accruals and reserves;

•

Experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the company’s financial statements, or experience actively supervising one or more persons engaged in such activities;

•

An understanding of internal controls and procedures for financial reporting; and

•

An understanding of audit committee functions.

The audit committee financial expert definition adopted by the SEC is less restrictive and less focused on technic al accounting or auditing expertise than the definition it originally proposed. Consequently, a greater number of audit committee members should qualify as audit committee financial experts than would have qualified if the SEC had adopted its original proposal. The recently adopted SEC rules provide that an audit committee financial expert could acquire the five required attributes through any one or more of the following avenues: •

Education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor, or experience in one or more positions that involve the performance of similar functions;

•

Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor, or person performing similar functions;

•

Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements; or

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Corporate Responsibility Alert •

A publication of Nixon Peabody LLP

Other relevant experience; but where the expert is qualified on the basis of having other relevant experience, the company must provide a brief listing of the relevant experience.

As an acknowledgment that an audit committee financial expert may acquire the five required attributes in a variety of ways, the SEC observed, in its adopting release, that the relevant experience does not need to have been acquired from an SEC reporting company. The experience can be gained, for example, at a private company or a foreign company that is publicly traded abroad but is not registered under the Securities Exchange Act. Moreover, the SEC emphasized that the expertise should be the product of experience, not merely education. It noted also that investment bankers, venture capitalists and professional financial analysts may have the requisite knowledge and experience. Similarly, the SEC stated that individuals serving in governmental, self-regulatory and private sector bodies overseeing the banking, insurance, and securities industries may have the requisite knowledge and experience. In addition, the SEC stated that a principal executive officer should not be presumed to qualify as an audit committee financial expert. Instead, the board of directors must determine that he or she actively participated in and contributed to the process of addressing financial and accounting issues. The SEC’s final rules do not include the non-exclusive list of qualitative factors contained in the proposing release for a company’s board to consider in assessing audit committee financial expert candidates that had been included in its rule proposal. That list addressed such matters as breadth and level of an audit committee member’s understanding and involvement in relevant activities and the types of duties held in those positions. The SEC stated that a reporting company’s board of directors should consider all relevant facts and circumstances in its determination, including those qualitative factors the SEC had identified in that earlier list.

Safe Harbor for Audit Committee Financial Experts The final SEC rules include a safe harbor to clarify that: •

The audit committee financial expert will not be deemed to be an “expert” for any purpose, including liability under Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert;

•

The designation or identification of an audit committee financial expert does not impose on the audit committee financial expert any duties, obligations or liabilities that are greater than those imposed on him or her as a member of the audit committee and board of directors; and

•

The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations or liability of any other member of the audit committee.

Consequently, information in a registration statement reviewed by an audit committee financial expert will not be deemed “expertised” unless that person is acting in the capacity of some other type of traditionally recognized expert. Moreover, the audit committee financial expert will not be expected to exercise a higher level of due diligence with respect to a registration statement as a result of being designated or identified as an audit committee financial expert. The safe harbor is likely to be tested by the plaintiffs’ bar.

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Corporate Responsibility Alert

A publication of Nixon Peabody LLP

Possible Delaware Law Claims The validity of the safe harbor can be expected to be tested through litigation. In recent conferences, Justice Strine of the Delaware judiciary has remarked that the Delaware Chancery Court may be receptive to taking on cases involving audit committee independence. It would require only a relatively short extension to bring cases involving audit committee financial experts within the purview of the Delaware courts. The jurisdictional nexus for these cases, as described by Justice Strine, could be gained by asserting claims of breach of directors’ duties of care and loyalty. A development along these lines would undermine significantly the safe harbor intended by the SEC.

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Advisory Tips

In implementing the audit committee financial expert disclosure rules, SEC reporting companies should consider: •

The audit committee financial expert rule is a disclosure rule, not a legal requirement to have an audit committee financial expert. However, the failure to have an audit committee financial expert could be embarrassing to the company, cause the company to lose or be unable to gain institutional investor support for its securities, or possibly be used as evidence of poor corporate governance in connection with securities or corporate governance litigation against the company.

•

The board of directors should consider whether it wishes to search for a new member with more financial expertise and experience than those presently serving on the audit committee.

•

The board of directors should consider succession planning with regard to membership on its audit committee to assure continual representation on the committee by individuals with financial expertise and experience.

•

If more than one audit committee member might qualify as an audit committee financial expert, the board of directors should consider whether to designate more than one audit committee financial expert. Notwithstanding the regulatory safe harbor for audit committee financial experts, the boards of directors of some companies have elected to designated multiple audit committee financial experts in order to avoid the possibility that one member of the committee has greater potential duties and liability than the other members of the committee and to demonstrate their dedication to good corporate governance.

•

If it has not done so already, an SEC reporting company should consider modifying its audit committee charters to require that the audit committee have at least one financial expert. When modifying its charter, the company should review, or consider adding, appropriate disclaimers concerning the scope of the committee’s responsibilities. The updated charter can be used as a working draft to be updated as the SEC and self-regulatory organizations implement further corporate governance reforms. The audit committee should use the audit committee charter to develop a meeting agenda and allocate responsibilities to ensure that the committee fulfills its responsibilities under the charter.

__________

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Corporate Responsibility Alert

A publication of Nixon Peabody LLP

SHOULD YOU ACCEPT THAT INVITATION TO JOIN THE BOARD OF DIRECTORS? Richard F. Langan, Jr. Be careful, you might get what you wish for. If you have been invited to join the Board of Directors of a public company, you might want to evaluate carefully the company and its Board of Directors. In this era of dynamic changes in corporate governance, the role and responsibilities of the corporate director have been heightened along with the accountability of the corporate director to the investing public. Consequently, before accepting that invitation, you may want to ask yourself and the company a series of questions in order to assure yourself that you are making a wise decision.

R Why do they want me? You should evaluate whether you possess special skills, attributes or experience that will be valued by the Board of Directors. Consider how your characteristics contrast with those of the company’s senior management and other members of the Board. Ensure that you are not being selected in order to add luster to an otherwise undistinguished Board. In recent years, some prominent members of public company Boards have found their reputations sullied as a result of their association with a company that used poor corporate governance practices. R What is the company’s attitude toward disclosure and corporate governance? SEC Chairman William Donaldson recently remarked that the senior management and Board of Directors of a public company must set an appropriate tone from the top that assures employees, shareholders and the public at large that the company is dedicated to principles of strong corporate governance and of upholding strict ethical and legal norms. Through discussions with the company’s CEO, CFO, general counsel and the members of senior management as well as with members of the Board, you can assess whether the company meets those standards. During this process, you should request and review copies of minutes of the Board and its committees over the past several years. The minutes should be very revealing about procedural safeguards undertaken by the Board and its committees, and may be informative about the level of communication between senior management and the Board and its committees as well as the use of outside advisors to assist them in making wellinformed decisions. Likewise, a review of recent SEC comment letters issued in connection with the review of the company’s securities law filings and responses to those comments submitted by the company and its advisors should provide further insights into the adequacy of the company’s financial reporting and securities law disclosures and the company’s attitude toward compliance with applicable securities laws and regulations. In addition, a review of the company’s SEC filings, financial statements and corporate website as well as of reports of financial analysts who regularly cover the company may shed light on this issue. In particular, the company’s Form10-K or proxy statement should disclose certain securities law violations, corporate bankruptcies and related matters to which company directors may have been subject during the past five years, which could reflect unfavorably upon their integrity or competency. Moreover, you should review a copy of the company’s code of ethics and inquire as to the circumstances of any code violations or waivers. Similarly, you should examine recent management letters from the company’s independent auditor as well as other material communications from the auditor, and undertake a Lexis/Nexis or other database search to glean public views of the company.

R What will they want me to do? You should inquire as to what Board committee assignments you are likely to receive. Before accepting a committee assignment, you will want to be comfortable that you have the skill set and the available time to carry out the responsibilities of that position. For example, members of the Audit Committee or a stock exchange or Nasdaq listed company must be at least financially literate, and one member must satisfy the definition of an Audit Committee

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Corporate Responsibility Alert

A publication of Nixon Peabody LLP

Financial Expert. As to time availability, Board committees are meeting with increasing frequency in this new era of corporate governance, and committee members are finding that they are spending increased time outside of meetings orienting themselves concerning the company and their committee responsibilities in addition to preparing for meetings. You may want to look into the company’s Board policy concerning committee rotations in order to understand whether the more burdensome committee responsibilities are shared over reasonable time periods among all of the Board members.

R What is the company’s risk exposure? You will want to assess the company’s risk exposure and risk management techniques. This will entail discussions with, among others, the company’s CFO, risk manager, tax manager and General Counsel. During this process, you will want to be informed of the company’s financial risks, including contingent liabilities, off-balance sheet financing arrangements and hedging techniques, insurance coverage and claims history, tax exposure, and pending and threatened litigation and lawsuits. The company’s financial statement footnotes and the Management’s Discussion and Analysis section of the company’s SEC filings also should reveal a number of financial uncertainties encountered by the company. Moreover, you should look into risks faced by other members of the company’s peer group to determine whether the company may encounter those risks in the future. R How are Board members protected from potential liability? Many companies have included provisions in their certificates of incorporation that shield Board members from liability to the fullest extent permitted under the law of their states of incorporation. Similarly, many companies provide for the indemnification of Board members, subject to applicable legal restrictions, through provisions in their certificates of incorporation or by-laws or by contract. In addition, state corporation law may afford certain le gal protections to directors by allowing them to rely upon the advice and analysis of internal and external experts and advisors, and to consider constituencies other than the shareholders in carrying out their Board responsibilities. These legal, charter, by-law and contractual protections are usually supported by directors’ and officers’ liability insurance. You will want to receive and review, and have your personal counsel review, all relevant documentation on these matters, obtain information concerning any claims asserted or threatened to be asserted against Board members in recent years, and assess the financial viability of the company to make indemnification payments and of its D&O liability insurance carrier to make payments under the policy. R How do the Board and its committees function? You should try to learn the manner in which the Board functions and deliberates. You should inquire as to whether the Board has an independent chairman (which is not legally required), how it conducts executive sessions of independent directors, and whether there is a designated presiding director for those sessions on the role of presiding director rotates among Board or committee members, as applicable. The review of Board and committee minutes, discussed above, may offer clues as to the level of involvement of Board and committee members in the oversight of the company’s business and affairs. By reviewing the company’s proxy statement, you should be able to learn the nature of director conflicts of interest, related party transactions and interlocking directorships that might affect the behavior and decision making of the Board and committee members. Equally important, but more difficult to obtain, is information concerning the quality of discussion among Board and committee members, areas of disagreement among them and the methods by which they seek to resolve conflicts. Lastly, since your ability to function effectively as a Board member will be enhanced by being well informed about the company, you should look into the director orientation program offered by the company and opportunities offered by the company for the continuing education of directors. __________

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Corporate Responsibility Alert

A publication of Nixon Peabody LLP

UPDATE: SARBANES-OXLEY ACT OF 2002 AND RELATED REGULATIONS* IMPLEMENTATION DATES Compiled by Deborah McLean Quinn

Compliance Date Fiscal Years ending on or after March 15, 2002

Sarbanes Oxley Source PreSarbanes

Provision Table of shareholder approval of equity compensation plans in Form 10-K and proxy (if new plan submitted)

Description Forms 10-K, and proxy statements submitting equity compensation plans for shareholder approval, must contain a table disclosing all equity compensation plans, grouped by those which have been approved by shareholders and those which have not. In addition, a brief description of each equity compensation plan not approved by shareholders. Previously un-filed plans not approved by shareholders must be submitted as an exhibit to the Form 10-K in the year in which adopted. Plan category

(a) Number of securities to be issued upon exercise of outstanding options, warrants and rights

(b) Weighted average exercise price of outstanding options, warrants and rights

Securities and Exchange Act / Rules Location Regulation S-K Item 201(d) and 601(b)(10)(iii)(B)

(c) Number of securities remaining available for future issuances under the equity compensation plans (excluding securities reflected in column (a))

Equity Compensation Plans approved by security holders Equity Compensation Plans not approved by security holders Total

*

Excludes most changes to civil and criminal liability provisions contained in the Sarbanes Oxley Act of 2002. Does not include information specific to small business issuers, foreign private issuers or issuers of asset-backed securities. This summary table is prepared as of June 2, 2003. It is provided for educational and informational purposes only and is not intended and should not be construed as legal advice.

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Corporate Responsibility Alert Compliance Date July 30, 2002 or after SEC rules adopted

Sarbanes Oxley Source §409

A publication of Nixon Peabody LLP

Provision Real time disclosure

Description Commentators vary on their interpretation of the time for implementation of the obligation of issuers to “disclose to the public on a rapid and current basis such additional information concerning material changes in the financial condition or operations of the issuer, in plain English, which may include trend and qualitative information and graphic presentation, as the Commission determines, by rule, if necessary or useful for the protection of investors and in the public interest.” Is the statute effective immediately or only after some SEC rulemaking? Perhaps, since there is no deadline for SEC action and we have not had any guidance from the SEC so far, it is already effective and the rulemaking is to be limited to the trend and qualitative information and graphic presentations.

Securities and Exchange Act / Rules Location Securities Exchange Act of 1934 §13(l)

July 30, 2002

§402

No loans to directors or executive officers

An issuer must not, directly or indirectly, extend or maintain credit, to arrange for the extension of credit, or to renew an extension of credit, in the form of a personal loan to or for any director or executive officer of the issuer – but a loan existing on July 30, 2002, may be maintained so long there is no material modification of any term of any such extension or any renewal. No interpretative advice on what constitutes a loan has been issued.

Securities Exchange Act of 1934 §13(k)

July 30, 2002

§906

Certification by CEO and CFO (criminal sanctions)

Each periodic report containing financial statements filed with the SEC must be accompanied by a certification by the CEO and CFO: (i) that the periodic report accompanying the statement fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) that the information contained in the period report fairly presents, in all material respects, the financial condition and results of operations of the issuer. “Accompanied” had been interpreted to mean submitted as correspondence or as an exhibit under Item 601 to a Form 8-K. Interim guidance issued by the SEC on March 21, 2003 recommends filing the 906 certifications as an Exhibit 99 to Forms 10-K and 10-Q and that the exhibit will be treated as “accompanying” not filed. The SEC suggests that the following legend be added under the signatures on the 906 certification: “A signed original of this written statement has been provided to [the issuer] and will be retained by [the issuer] and furnished to the SEC on request.” We also recommend adding a legend such as the following at the top of the certification page: “The following certification accompanies the issuer’s Annual Report on Form 10-K [or Quarterly Report on Form 10-Q] and is not filed, as provided in Release 33-8212; 34-47551 dated March 21, 2003.”

18 U.S.C. §1350

Proposing Release 33-8212; 34-47551 dated March 21, 2003

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Proposed amendment to Regulation S-K Section 601(b)(32)

Corporate Responsibility Alert Compliance Date July 30, 2002

Sarbanes Oxley Source §304

July 30, 2002

A publication of Nixon Peabody LLP Securities and Exchange Act / Rules Location

Provision Executive officer forfeitures on certain financial statement restatements

Description If an issuer is required to prepare an accounting restatement due to the material noncompliance of the issuer, as a result of misconduct, with any financial reporting under the securities laws, the CEO and CFO must reimburse the issuer for any bonus or other incentive-based or equity-based compensation received from the issuer during the 12 month period after the first public issuance or filing of the erroneous financial statements and any profits from the sale of the issuer’s securities during that 12 month period.

§305

Director and officer bars for unfitness and other equitable remedies

The SEC may seek and any federal court may grant a bar to an individual serving as a director or executive officer of a public company in the case of “unfitness” and seek any other equitable relief appropriate.

Amends §21(d)(2), §20(e), and 21(d) of the Securities Exchange Act of 1934

July 30, 2002

§409

Real time disclosures of material changes

Each issuer filing under Section 15(a) or Section 15(d) shall disclose to the public on a rapid and current basis such additional information concerning material changes in the financial condition or operations of the issuer, which may include trend and qualitative information and graphic presentations as the commission determines by rule is necessary or useful for the protection of investors and in the public interest. See new Form 8-K filing requirements below.

Securities Exchange Act of 1934 §13(l)

July 30, 2002

§408

Triennial review by SEC of Form 10-K

The SEC is required to review disclosures (including Forms 10-K) of issuers having securities traded on a national securities exchange or automated quotation system at least once every three years, scheduled considering: (i) issuers that have restatements, (ii) issuers that experienced significant volatility in stock price; (iii) issuers with the largest market capitalization; (iv) emerging companies with disparities in price to earnings ratios; (v) issuers whose operations significantly affect any material section of the economy; and (vi) other factors the SEC considers relevant.

August 29, 2002

§403

Two day filing of Forms 4

Directors, officers and holders of more than 10% of a class of equity security must file (i) at the time of 1934 Act registration; (ii) within 10 days of becoming a director, officer or 10% holder (Form 3); (iii) prior to the end of the 2nd business day following the date on which the change in ownership or purchase or sale of a security-based swap agreement; (iv) at such other times as the SEC rules may permit.

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Securities Exchange Act of 1934, §16(a) and Rule 16a -3(g)

Corporate Responsibility Alert Compliance Date August 29, 2002

Sarbanes Oxley Source §302

Provision CEO and CFO Certifications

Proposing Release 33-8212. 34-47551 dated March 21, 2003 Fiscal years ending on or after December 5, 2002

Release 33-8128 Sept 5, 2002

Fiscal years ending on or after December 5, 2002

Release 33-8128 Sept 5, 2002

A publication of Nixon Peabody LLP

Description CEO and CFO must certify each annual and quarterly report in precisely the form provided, which includes the establishing and maintaining of internal controls, disclosures to the audit committee, etc. Forms 10-K and 10-Q were revised to require the certifications to appear immediately following the signature page. Release 33-8212, 34-47551 dated March 21, 2003, proposes to amend Forms 10-K and 10-Q again to eliminate that requirement and to amend Regulation S-K Item 601 to add the 302 certifications as an exhibit to the report.

Disclose the existence of any company website and whether investors can obtain periodic reports on or through website

Additional disclosures are required in registration statements under the Securities Act of 1933 and accelerated filers (see below) Forms 10-K under the Securities Exchange Act of 1934:

New box on cover of Form 10-K Accelerated filers check status

Form 10-K amended to add following on cover page: Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes No .

Registration statements – (1) if the issuer files reports with the SEC and if so what reports; (2) references to the SEC public reference room and website, and (3) any Internet address of the issuer (encouraged unless issuer is an accelerated filer, in which case required), and (3) if you make 10-Ks, 10-Qs and 8-Ks available without charge on or through the issuer’s website as soon as reasonably practicable after filing, and if not, why not and if not whether you will provide copies of filings free of charge

Securities and Exchange Act / Rules Location Regulation S-K §404 Forms 10-K and 10-Q Proposed amendments to Forms 10-K and 10-Q and Regulation S-K Item 601(b)(32)

Regulation S-K Item 101(e) Rule 12b-2 – definition of accelerated file (below)

Form 10-K Rule 12b-2

Accelerated filers are issuers who meet the following at end of fiscal year: (i) market value of voting and non-voting stock held by non-affiliates is $75 million or more; (ii) issuer has been subject to §13(a) or §15(d) for at least 12 calendar months; (iii) issuer has filed at least one annual report; and (iv) issuer is not eligible to use Forms 10-KSB and 10-QSB

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Corporate Responsibility Alert Compliance Date January 26, 2003

Sarbanes Oxley Source §306 (a)

March 31, 2003 for Reg BTR §(b)(3)(i) and (iii)

Release 34-47225 Jan 22, 2003

Provision Bar on trades and stock based grants during pension fund blackouts Requires filing on Form 8-K to describe the blackout period and another 8-K if the period is changed

A publication of Nixon Peabody LLP

Description Regulation BTR (Blackout Trading Restriction): a complex provision, intertwined with U.S. D.O.L. ERISA requirements

Securities and Exchange Act / Rules Location Regulation BTR Form 8-K Item 11

Prohibits trading by directors or executive officers during a blackout period under an individual account plan which is temporarily suspended by the issuer or the trustee for more than three consecutive business days (subject to exceptions for periods described in the plan. Requires notices to the directors and executive officers and filing of a Form 8-K within five business days after receipt of a notice required by ERISA Section 101(i)(2)(E) or at least 15 days prior to the beginning of the period (for blackouts not triggered by the ERISA notice). A number of exceptions to the prohibition are provided, but issuers should note that there is no exception for awards under equity compensation plans for directors or executive officers, other than certain formula awards. There is also no exception for exercises of typical executive stock options during the blackout period.

February 27, 2003

Report of the SEC on Review of Fortune 500 Reports

Fortune 500 comments regarding improving disclosure

Report of the SEC Staff recites continued concern about matters troubling the SEC from a disclosure point of view for some years (short and worth reading http://www.sec.gov/divisions/corpfin/fortune500rep/htm ): § § § § § § § § § § § §

Improving MD&A Critical Accounting Policies Non-GAAP Financials Revenue Recognition Restructuring Charges Impairment Charges: Long lived assets Impairment Charges: Securities held for investment Impairment Charges: Good will and other intangible Pension plans Segment reporting Securitizations and off balance sheet arrangements Environmental and product liability disclosure

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Interpretation of current: Regulation S-K §303 New S-K 410(b) SAB 101 FR-60 SFAS No 115 SFAS No 142

Corporate Responsibility Alert Compliance Date March 28, 2003

Sarbanes Oxley Source §401(b)

Provision Non-GAAP financial information disclosures in press releases and filed documents

A publication of Nixon Peabody LLP

Description Three significant requirements: (1) If a non-GAAP financial measure is publicly disclosed in anything (press release, orally, webcast, filing), and it must be presented with the most directly comparable GAAP financial measure, it must be accompanied by a clear, understandable reconciliation between the non-GAAP and the GAAP measures. If the disclosure is oral or webcast, etc., it is ok if the required information is at that time available on the issuer’s website and the website address is given in the same presentation as the non-GAAP financial measure. (2) Earnings press releases must be furnished to the SEC on Form 8-K, new Item 12, within five business days. (Not filed unless incorporated by reference in another filing.) (Interim filings, before EDGAR is revised to accept Item 12, should be made under Item 99) Any other oral or webcast or broadcast disclosures of non-public information on quarter end or year end results of operations or financial condition must occur with 48 hours of a written announcement or release furnished on Form 8-K Item 12 and must be broadly accessible, posted on the issuer’s website and broadly pre-announced.

Securities and Exchange Act / Rules Location New Regulation G Form 8-K amended to add new Item 12 “Results of Operations and Financial Condition” Regulation S-K Item 10 (e) Use of non-GAAP financial measures in Commission filings

(3) If non-GAAP financial measures are provided in an SEC filing: (a) the most directly comparable GAAP financial measure must be presented as prominently as the non-GAAP measure, (b) a clear reconciliation between the GAAP and the non-GAAP must be presented; (c) management must describe why the presentation of the non-GAAP measure provides investors with useful information, and the other purposes for which management uses the non-GAAP measure. The non-GAAP measure must not: (i) exclude liabilities that require cash settlement except in EDIT and EBITDA measures; (ii) adjust the non-GAAP measure to smooth “non-recurring” items likely to recur within two years; (iii) present non-GAAP measures on the face of any financial statement prepared in accordance with GAAP, or (iv) present any non-GAAP financial measure on the face of any pro forma as prepared under Regulation S-X Article 11. March 28, 2003

§409

Earnings releases filed on Form 8-K

See above.

Form 8-K amended to add new Item 12 “Results of Operations and Financial Condition”

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Corporate Responsibility Alert Compliance Date March 31, 2003

Fiscal Years ended on or after June 15, 2003

Sarbanes Oxley Source §306

§401 Release 33-8182, 34-47264

A publication of Nixon Peabody LLP

Provision Notices to SEC and directors and officers of pension fund black-out periods

Description New Regulation BTR (see above) describes the trading prohibitions during certain defined blackout periods and, in Rule 104, requires that notices be given to each director, and officer and the SEC within 5 business days after an ERISA §101(i)(2)(E) notice is received or (if there is no ERISA notice) at least 15 days before the expected or actual start of the blackout period stating: the reasons for the blackout; the plan transactions to be suspended; the class of securities subject to the blackout; the length of the blackout (either dates, or weeks in which it will occur); and the contact person for questions. Form 8-K new Item 11 must be filed at the same time notices are required to be given to directors officers and the SEC.

Disclosures of offbalance sheet transactions

MD&A is amended to require a separately captioned section describing off-balance transactions that have or are reasonably likely to have a current or future effect on financial condition, revenues, expenses, results of operations, liquidity, etc. Description must include information necessary for an understanding of the arrangements and their effect, the nature and business purpose, the importance of off-balance sheet transactions to the issuer, revenues, expenses, liabilities (actual or contingent), remaining interest of issuer and other matters.

Securities and Exchange Act / Rules Location New Regulation BTR Form 8-K amended to add new Item 11 “Temporary Suspension of Trading under Registrant’s Employee Benefit Plans”

Securities Exchange Act of 1934 §13(j) Regulation S-K Item 303

MD&A must also include a table of contractual obligations, with relevant footnotes of additional information, which may include causes for acceleration, timing and amount of the obligations, etc. Forward looking statement protection is available under the safeharbor. Contractual Obligations Long term debt Capital Lease Operating Lease Purchase Obligations Other Long-term Liabilities reflected on GAAP BS Total

Fiscal Years ended on or after July 15, 2003

§407

Disclose existence of audit committee financial expert

Payments Due by Period Less than 1 yr 1-3 years 3-5 years

Total

More than 5 yr

Adds disclosure that the company’s board has determined that: (i) its Audit Committee has a “financial expert” and the name and whether the individual is “independent” or (ii) its Audit Committee does not have a financial expert and why not. Adds definitions of “financial expert”; “independent” is as defined in Sch. 14A Item 7(d)(3)(iv).

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Regulation S-K Item 401(h) Form 10-K Part III amended to include disclosure

Corporate Responsibility Alert Compliance Date Fiscal years ended on or after June 15, 2003

Sarbanes Oxley Source §406

A publication of Nixon Peabody LLP

Provision Disclose existence of and copy of code of ethics for CEO and senior financial officers

Description Adds disclosure whether the company has a code of ethics applicable to CEO, CFO, principal accounting officer or controller and others performing like functions and if not, why not. The code of ethics basics are outlined in new S-K 406: written standards reasonably designed to deter wrongdoing and to promote: (1) honest and ethical conduct; (2) full, fair accurate, timely and understandable disclosure; (3) compliance with laws, rules and regulations; (4) prompt internal reporting of violations; and accountability. Waivers of compliance with the code of ethics must be filed on Form 8-K, new Item 10 within 5 business days after the event as must any amendments to the code. An 8-K is not required if the issuer posts the information on its website within 5 business days, keeps it posted for 12 months and has disclosed in its most recent Form 10-K its intention to post this information on the website and the site’s address.

Securities and Exchange Act / Rules Location Regulation S-K Item 406 Item 601(b)(14) Form 10-K Part III amended to include disclosure Form 8-K new Item 10

May 6, 2003

§202 Release 33-8183, 34-47265

Audit committee pre-approve all nonaudit services including tax

Defines as not independent an accountant that is not engaged upon approval by the audit committee for any audit or non-audit services; unless the engagement is pursuant to preapproved policies of the Audit committee that do not constitute a delegation to management of the audit committee’s responsibilities; or is for less than 5% of the revenues paid by the audit client to the auditor in that year, and were not recognized as non-audit and were promptly brought to the attention of the audit committee and approved by the audit committee.

Securities Exchange Act §10A(g) Regulation S-X Item 2-01(c)(7)

May 6, 2003

§201 Release 33-8183, 34-47265

Prohibition of certain non-audit services

Defines an accountant as not independent if he has provided any of the following services to the client within the audit and engagement period: (i) bookkeeping; (ii) financial information system design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing; (vi) management functions, (vii) human resources, (viii) broker dealer, investment advisor or investment banking services; (ix) legal services; or (x) expert services unrelated to the audit.

Securities Exchange Act §10A(i)A Regulation S-X Item 2-01(c)(4)

May 6, 2003

§206 Release 33-8183, 34-47265

Restriction on hiring former auditors

Rules limiting the time periods for issuers to hire former auditors in senior financial reporting positions in the issuer without causing the auditor to become not independent.

Regulation S-X Item 2-01(c)(2)

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Corporate Responsibility Alert Compliance Date May 6, 2003

Sarbanes Oxley Source §203 Release 33-8183, 34-47265

A publication of Nixon Peabody LLP

Provision Audit partner rotation

Description Defines an accountant as not independent if the individual has served as lead partner or concurring partner for more than five consecutive years or served as other audit team engagement partner providing 10 or more hours of work or serving as lead on the audit of a subsidiary whose assets or revenues are 20% or more of those of the issuer for more than seven years (with some additional combinations)

Securities and Exchange Act / Rules Location Securities Exchange Act §10A(j) Regulation S-X Item 2-01(c)(6) and (f)

May 6, 2003

§204 Release 33-8183, 34-47265

Auditor report to audit committee of critical accounting policies and practices, alternatives

Requires auditor to report, within 90 days prior to filing the audit report with the SEC, to the audit committee of the issuer with respect to critical accounting policies, alternative treatments within GAAP for material items that have been discussed with management; the ramifications of such alternatives, the preferred treatment by the auditors and any written communications (including management letters and schedules of unadjusted differences) between auditors and management

Regulation S-X Item 2-07

May 6, 2003

§202 Release 33-8183, 34-47265

Additional Proxy Statement disclosure of fees, approval process

Disclose two years of audit fees, audit-related fees, tax fees and all other fees, the audit committee’s pre-approval policies and procedures and what percentage of each type of the services represented by the fee categories were approved by the audit committee; if more than 50% of hours spent in audit were performed by contractors (not the auditor’s staff), disclose that information.

Schedule 14A Item 9

May 6, 2003

Release 33-8183, 34-47265

Additional 10-K disclosure of fees, approval process

Disclose two years of audit fees, audit-related fees, tax fees and all other fees, the audit committee’s pre-approval policies and procedures and what percentage of each type of the services represented by the fee categories were approved by the audit committee; if more than 50% of hours spent in audit were performed by contractors (not the auditor’s staff), disclose that information.

Form 10-K amended to add Item 16 requiring same information as Schedule 14A Item 9

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Corporate Responsibility Alert Compliance Date June 27, 2003

Sarbanes Oxley Source §303 Release 34-47890

Provision Prohibition on improper influence on accountants conducting audits

A publication of Nixon Peabody LLP

Description Section 303 of Sarbanes Oxley gave the SEC exclusive authority to enforce rules that it was to adopt prohibiting any officer or director of an issuer, or any person “acting under the direction thereof” to take any action to “fraudulently influence, coerce, manipulate, or mislead” any accountant engaging in an audit for the purpose of making the financial statements materially misleading. Definitions abound in the rules, with most of the gloss in the adopting release: issuer is defined under §3 of the 1934 Act (includes all private issuers, not just those covered by Sarbanes Oxley); officers and directors are defined inclusively under Rule 3b-2 and Secion 3(a)(7) of the 1934 Act; and “under the direction of” means more than “under the supervisions of” and may include “not only lower level employees of the issuer but also other partners or employees of the the accounting firm (such as consultants or forensic accounting specialists retained by counsel to the issuer) and attorneys, securities professionals, or other advisors” or ‘customers, vendors or creditors who provide false or misleading confirmations or other false or misleading information to the auditors, or who enter into “side agreements” that enable the issuer to mislead the auditor.” Prohibited types of conduct are those that, if the person knows or should know that if successful, could result in rendering the issuer’s financial statements to be filed with the SEC materially misleading, and include, directly or indirectly: § § § § § §

offering or paying bribes or other financial incentives (including offering future employment or non-audit contracts); providing inaccurate or misleading legal analysis; threatening to cancel or canceling existing audit or non-audit engagements if the auditor objects to the issuer’s accounting treatment; seeking to have a partner removed from an engagement because the partner objects to the issuer’s accounting; blackmailing; and making physical threats.

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Securities and Exchange Act / Rules Location Renumbered Rule 13b22, as 13b2-2(a) and adding Rules 13b2-2(b) and 13b2-2(c)

Corporate Responsibility Alert Compliance Date June 30, 2003 Filing system available April 25, 2003

Sarbanes Oxley Source §403(a)(4) Release 34-46421 Release 33-8230, May 7, 2003

Provision Mandatory electronic filing of Forms 3, 4 and 5 Website posting of forms 3, 4 and 5 on corporate website on business day after filing

A publication of Nixon Peabody LLP

Description The SEC created a new website for filing of ownership reports of directors, executive officers and 10% holders on Forms 3, 4, and 5 and amendments thereto https://www.onlineforms.edgarfiling.sec.gov (please note the https ). All individuals and 10% holders need their own CIK obtained from the SEC by faxing form ID to the SEC at (202) 504-2474 or (703) 914-4240. Each individual should have no more than one number even if an officer of one company and a director of another. As of June 30, 2003, there will be no temporary hardship exemption to allow paper filing of a Form 3, 4 or 5, although in the appropriate case, a filing date adjustment may be available. The adjustment will not be available for failing to obtain filer codes in time. After programming changes to be made by the end of July 2003, the forms may be filed and receive the same day filing date up to 10:00 p.m. Washington D.C. Time. Before that programming is implemented, filings made after 5:30 but before 10:00 pm will receive the next day’s filing date, but will be treated as filed when received. Issuers that maintain public corporate websites must post the filings on that website by the end of the business day following the filing maintain it there for at least 12 months. This may be satisfied by a hyperlink to EDGAR or another service that provides the information required in a timely manner. The SEC recommends that the issuer post an address to which electronic filings may be sent to it to ensure timely filing.

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Securities and Exchange Act / Rules Location Amendments to Regulation S-T Rule 101 to require electronic filing of forms Rule 13(a) Amendment to Section 16a -3 to add (k) requiring website posting Various amendments to Forms 3, 4 and 5

Corporate Responsibility Alert Compliance Date First annual stockholders meeting after 1/15/ 04 but in any event by 10/31/04

Sarbanes Oxley Source §301 SEC Announcement 4/1/03

Provision Audit committee criteria for listing on national securities exchange or association Independence

Description • Based on the SEC press release: under the new rules, national securities exchanges and national securities associations will be prohibited from listing any security of an issuer that is not in compliance with the following requirements. § §

Hire, pay and oversee accountants Complaint procedure including confidential anonymous employee procedure

A publication of Nixon Peabody LLP

§

§ §

Each member of the audit committee of the issuer must be independent according to the specified criteria in Section 10A(m). The audit committee must be directly responsible for: Ø the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the issuer, and Ø read the registered public accounting firm must report directly to the audit committee. The audit committee must establish: Ø procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, Ø including procedures for the confidential anonymous submission by employees of concerns regarding questionable accounting or auditing matters. The audit committee must have the authority to engage independent counsel and other advisors, as it determines necessary to carry out its duties. The issuer must provide appropriate funding for the audit committee.

• The new rules will establish Section 10A(m)’s two criteria for audit committee member independence. § Audit committee members must be barred from accepting any consulting, advisory or compensatory fee from the issuer or any subsidiary, other than in the member’s capacity as a member of the board or any board committee. §

An audit committee member must not be an affiliated person of the issuer or any subsidiary apart from capacity as a member of the board or any board committee.

The new rules also will make several updates to the Commission’s disclosure requirements regarding audit committees. [Rule not yet released.] Each of NYSE and NASD have proposed to the SEC more specific independence rules and will propose additional corporate governance listing requirement.

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Securities and Exchange Act / Rules Location Securities Exchange Act §10A(m) NYSE/NASD/other SRO’s rules (see below

Securities Exchange Act §10A(l)(4)

Corporate Responsibility Alert Compliance Date

August 2003 60 days after publication in the Federal Register

Sarbanes Oxley Source NASD – Proposed 3/17/03 Release 34-47516 Public comment period has expired but no SEC order has issued as of June 2, 2003 SEC press release 2003-66, May 27, 2003

A publication of Nixon Peabody LLP

Provision Corporate governance proposal, including audit committee issues addressed above by SEC

Description Proposed: (1) Board must have majority of independent directors; (2) independent directors must have regularly scheduled exe cutive sessions; (3) compensation of CEO set by either majority of independent directors in executive session or compensation committee composed solely of independent directors, other executive officers by same but CEO may be present with voice but not vote; with limited exception for one of three compensation committee directors to be not independent for up to two years so long as not company employee or family member; (4) nomination of directors made by a majority of independent directors or a nomination committee of solely independent directors provided one in three may be not independent for up to two years if not employee or family; and (5) a Controlled company is not subject to (1)-(4) if 50% of voting power held by person or group and disclosure made and explained in proxy statement. Audit committee charter and composition requirements proposed.

Changes to Certification under Sarbanes Oxley § 302 and location of §906 certification as an exhibit “furnished” with the applicable report

Final rules will amend the exhibit requirements for periodic reports to include the Sarbaes Oxley required certifications under Sections 302 and 906. The form of the §302 certification will be amended. The §906 certification may be “furnished” rather than filed to allow the issuer to avoid Section 18 liability under the 1934 Act and, so long as not expressly incorporated by reference, §11 liablity under the 1933 Act.

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Securities and Exchange Act / Rules Location Proposed IM-4200 NASD Rule 4350

Final rule not published or available as of June 2, 2003 Likely amendment of Regulation S-K Item 601 and 1934 Act periodic report forms (10-K and 10-Q)

Corporate Responsibility Alert Compliance Date Six months after publication of SEC approval in the Federal Register (late 2003 or early 2004) for all except requirement for majority of board as independent directors for which there is generally an 18month implementation period (some companies with staggered boards have an extra year for implementation)

Sarbanes Oxley Source NYSE Proposal modified and restated in Amendment No. 1 Release 34-47672

Provision Full Corporate governance proposals Revised and published by the SEC on April 11, 2003; comment period expired May 8, 2003 – no SEC order as of June 2, 2003

A publication of Nixon Peabody LLP

Description Re-proposed extensive governance requirements for listed companies, including majority independent directors, independent audit, nominating, governance and compensation committees. When effective, amended Listed Company Manual 303A will apply to all companies with listed equity securities (but only in limited fashion to “controlled companies,” companies with only debt or preferred stock listed, and foreign private issuers). Majority of the Board must be independent: § Board must determine each “independent” director has no material relationship with the listed company (directly or through another entiy) and must disclose its determinations in the proxy statement. § A person who receives $100,000 or more (or whose immediate family member receives $100,000 or more) in direct compensation from the issuer other than director and committee fees, pension or other deferred compensation is not independent for 5 years after ceasing to receive such compensation. (Board can negate the presumption of materiality of the compensation and compensation for former service as an interim CEO or Chairman may be ignored in the Board’s determination.) § A person who (or whose immediate family member) is affiliated with or employed in a professional capacity with the company’s internal or external audit is not independent until 5 years after the end of the relationship. § A person who is an executive officer of another company where any of the listed company’s present executives serves on the compensation committee is not independent for 5 years after such service terminates. § A person who is an executive officer or employee of (or whose immediate family member is an executive officer of) a company (A) where that company’s business accounts for the greater of 2% or $1 million of the listed company’s consolidated gross revenues, or (B) for which the listed company accounts for the greater of 2% or $1 million of such company’s revenues, is not independent until 5 years after falling below the threshold. Non-management directors must meet at regularly scheduled executive sessions without management. Listed companies must have a nominating/corporate governance committee composed entirely of independent directors with a written charter stating its purpose, goals and responsibilities and requiring annual self evaluation.

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Securities and Exchange Act / Rules Location Corporate Governance Proposals approved by NYSE on August 1, 2002, and sent to the SEC; Reviewed with a view toward consistency across markets but reproposal still much more far-reaching than NASD proposal Proposed Listed Company Manual Rule 303A

Corporate Responsibility Alert Compliance Date

Sarbanes Oxley Source

Provision

A publication of Nixon Peabody LLP Securities and Exchange Act / Rules Location

Description Listed companies must have a compensation committee composed entirely of independent directors with with a written charter stating its purpose, goals and responisibilities (including sole authority for CEO’s compensation level based on his evalaution, approving corporate goals and objectives for CEO compensation purposes and recommendations to the Board for non-CEO compensation and incentive compensation and equity-based compensation plans), evaluation and requiring annual self evaluation. Listed companies must have an audit committee with at least 3 members all of whom are independent directors (with independence as defined in 1934 Act Rule 10A-3 as well as previous NYSE standards) with a written charter containing specific enumerated purposes, duties and responsiblities, and requiring an annual self evaluation. Listed companies must have an internal audit function. Listed companies must adopt and disclose corporate governance guidelines. Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees and promptly disclose any waivers of the code for directors or executive officers.

CEOs of listed companies must certify annually to the NYSE that the CEO is not aware of any violation of the corporate governance listing standards. NYSE is empowered to issue public reprimand letters to listed companies which violate a listing standard. NYSE Proposed 3/12/03

Independent directors – Superceded by Release 34-47672 (April 11, 2003)

Proposes definition of independent director and requires listed companies to have a majority of independent directors. See above.

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Proposed Listed Company Manual §303A

Corporate Responsibility Alert Compliance Date Fiscal periods ending on or after September 15, 2003

Sarbanes Oxley Source §404 Proposing Release 33-8138, 34-46701 SEC press release 2003-66, May 27, 2003

Fiscal years ending on for after 12/15/02 and before 12/15/ 03

Release 33-8128; 34-46464

A publication of Nixon Peabody LLP

Provision CEO and CFO evaluations of internal controls and procedures and accountant’s attestation as to effectiveness

Description Since the timing of final rules and implementation were not mandated by Sarbanes, the SEC did not finalize its proposed rule to implement §404. The SEC has proposed not to have it implemented until fiscal years ending on or after September 15, 2003. Rationales for the delay are to allow the Public Company Accounting Oversight Board time to adopt standards for attestation engagements and to allow companies and audit committees to prepare. (See Release 33-8177; 34-47325) On May 27, 2003, the SEC further dalayed implementation until fiscal years ended on or after June 15, 2004 for accelerated filers and April 15, 2005 for all other filers.

Shortened time period for filing 10-K’s, 10-Q’s, updates to registration statements and prior to proxy mailings.

Accelerated Filer: File 10-K 90 days after FYE File 10-Q 45 days after FQE Age of financial statements at effective date of registration statement or at mailing date of proxy statement: 135 days

Securities and Exchange Act / Rules Location Proposed Rules: Regulation S-X Item 1-02(a) and 2-02(f) Rules 13a-15 and 15d-15

Securities Exchange Act Rule 12b-2 Regulation S-X Rule 3-12(g) Forms 10-K and 10-Q

Unless effectiveness or mailing is within 90 days of FYE in which case 3Q numbers acceptable, but amendment must be made adding FYE if available before effectiveness or mailing or if effectiveness or mailing is more than 45 days after FYE and issuer does not meet Rule 3-01(c) Fiscal years ending on or after 12/15/03 and before 12/15/04

Release 33-8128; 34-46464

Shortened time period for filing 10-K’s, 10-Q’s, updates to registration statements and prior to proxy mailings.

Accelerated Filer: File 10-K 75 days after FYE File 10-Q 45 days after FQE Age of financial statements at effective date of registration statement or at mailing date of proxy statement: 135 days

Securities Exchange Act Rule 12b-2 Regulation S-X Rule 3-12(g) Forms 10-K and 10-Q

Unless effectiveness or mailing is within 75 days of FYE in which case 3Q numbers acceptable, but amendment must be made adding FYE if available before effectiveness or mailing or if effectiveness or mailing is more than 45 days after FYE and issuer does not meet Rule 3-01(c)

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Corporate Responsibility Alert Compliance Date Next proxy season for calendar year issuers

Fiscal years ending on or after June 15, 2004

Sarbanes Oxley Source SEC Release 34-47778, May 1, 2003

§404 Press release 2003-66, May 27, 2003

A publication of Nixon Peabody LLP

Provision Notice of solicitation of public views regarding possible changes to the proxy rules

Description The SEC has directed staff to review the proxy rules, including: shareholder proposals, director nominations, election of directors, contests for corporate control, and disclosures of large shareholders or groups, and to consult all interested parties and recommend changes to the proxy rules to the SEC by July 13 , 2003. Comment letters have been received from various investors (state pension funds, primarily) but not from issuers to date (June 2, 2003). The thrust seems to be toward an improved ability of shareholders to nominate and elect directors, replacing those not seen to exercise appropriate oversight to protect the interests of shareholders.

Accelerated filers required to include Management’s report on internal control over financial reporting

At the SEC open meeting on May 27, 2003, rules under Sarbanes Oxley §404 were approved, varying from the proposed rules (Release 33-8138, October 22, 2002). According to the SEC press release following the open meeting, issuers who are not accelerated filers will have until fiscal years ending on or after April 15, 2005, to comply. Management will be required include an annual internal control report including: § a statement of management responsibility for eatablishing and maintaining adequate internal control over financial reporting; § a statement of the framework used by management to evaluate the effectiveness of internal control; § management’s assessment of the effectiveness of internal control as of year end; and § a statement that the issuer’s auditor has issued an attestation report on management’s assessment. Quarterly evaluations of changes that have, or are reasonably likely to, affect internal control over financial reporting will be required. “Internal control over financial reporting” will be defined to mean a process designed by or under the supervisions of the principal executive and financial officers of the issuer and put into effect by the board, management and other issuer personnel to provide reasonable assurance of the reliablity of financial reporting and the preparation of financial statements for external use in accordance with GAAP, including policies and procedures: § which provide for rmaintanence of records in reasonable detail reflecting the transactions and dispositions of assets; § which provide reasonable assurance that transactions are recorded to permit perparation of financial statemetns and that receipts and expenditures are made only in accordance with authorizations of the management and board of directors; and § which provide reasonable assurance as to prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the issuer’s financial statemenst.

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Securities and Exchange Act / Rules Location Possibly rules under Section 14(a) of the 1934 Act and Schedule 14A

Final rules not published as of June 2, 2003

Corporate Responsibility Alert Compliance Date Fiscal years ending after 12/15/ 04 and before 12/15/05

Sarbanes Oxley Source Release 33-8128; 34-46464

Provision Shortened time period for filing 10-K’s, 10-Q’s, updates to registration statements and prior to proxy mailings.

A publication of Nixon Peabody LLP

Description Accelerated Filer: File 10-K 60 days after FYE File 10-Q 40 days after FQE Age of financial statements at effective date of registration statement or at mailing date of proxy statement: 130 days

Securities and Exchange Act / Rules Location Securities Exchange Act Rule 12b-2 Regulation S-X Rule 3-12(g) Forms 10-K and 10-Q

Unless effectiveness or mailing is within 60 days of FYE in which case 3Q numbers acceptable, but amendment must be made adding FYE if available before effectiveness or mailing or if effectiveness or mailing is more than 45 days after FYE and issuer does not meet Rule 3-01(c) Fiscal years ending on or after April 15, 2005

SEC press release 2003-66, May 27, 2003

Fiscal years ending on or after 12/15/05

Release 33-8128; 34-46464

Implements requirements of Management’s report on Internal Control over Financial Reprting for other issuers

The SEC has postponed until fiscal years ended on or after April 15, 2005 the implementation of the management report on internal control and related auditor attestation for all non-accelereated filer issuers, including small business and foreign private issueres. See above.

Final rules not yet available or published.

Accelerated Filer: File 10-K 60 days after FYE File 10-Q 35 days after FQE

Securities Exchange Act Rule 12b-2

Age of financial statements at effective date of registration statement or at mailing date of proxy statement: 125 days

Regulation S-X Rule 3-12(g) Forms 10-K and 10-Q

Unless effectiveness or mailing is within 60 days of FYE in which case 3Q numbers acceptable, but amendment must be made adding FYE if available before effectiveness or mailing or if effectiveness or mailing is more than 45 days after FYE and issuer does not meet Rule 3-01(c)

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Corporate Responsibility Alert

A publication of Nixon Peabody LLP

If you have any questions or require further information regarding these or any other matters, please call your regular Nixon Peabody contact or feel free to contact any of the partners and counsel in our Corporate Governance Law practice group listed on the final page of this Corporate Responsibility Alert. The foregoing summary of recent developments in the law and practice of corporate governance is provided by Nixon Peabody for education and informational purposes only. It is not a full analysis of the matters summarized and is not intended and should not be construed as legal advice. This publication may be considered advertising under applicable laws. If you are not currently on our mailing list and would like to receive future publications of our Corporate Responsibility Alert, please send your contact information, including your e-mail address, to [email protected].

- 25 -

Corporate Responsibility Alert

A publication of Nixon Peabody LLP

Corporate Governance Law Practice Team Please feel free to call or e -mail (emailname @nixonpeabody.com) any of the corporate governance team members listed below. ATTORNEY Bruce Baker

E-MAIL NAME bbaker

PHONE (585) 263-1232

David Barbash

dbarbash

(617) 345-6024

Michael Barron

mbarron

(617) 345-1116

Roger Berg

rberg

(212) 940-3015

Gregory Blasi

gblasi

(212) 940-3789

Allan Cohen Jeffrey Cohen

acohen jcohen

(516) 832-7522 (202) 585-8395

James Corbelli

jcorbelli

(415) 984-8273

Roger Crane

rcrane

(212) 940-3190

Brian Crush

bcrush

(617) 345-1122

Henry DePippo

hdepippo

(585) 263-1243

Patricia Dolan

pdolan

(617) 345-6088

Justin Doyle

jdoyle

(585) 263-1359

John Duncan

jduncan

(415) 984-8271

Rob Edwards J.P. Ellison

redwards jellison

(401) 454-1025 (202) 585-8332

Brent Faye

rfaye

(415) 984-8365

Frank Feeney

ffeeney

(617) 345-6107

Steven Fuller

sfuller

(617) 345-1349

Lori Green

lgreen

(585) 263-1236

Fred Grein

fgrein

(617) 345-6117

Raymond Gustini

rgustini

(202) 585-8725

James Hood

jhood

(603) 628-4051

Charley Jacobs Alexander Jordan

cjacobs ajordan

(716) 853-8107 (617) 345-1103

Gordon Lang

glang

(202) 585-8319

Richard Langan

rlangan

(212) 940-3140

Stephen Lichatin

slichatin

(401) 454-1015

James Locke

jlocke

(585) 263-1613

Richard McGuirk

rguirk

(585) 263-1644

Timothy McTaggart

tmctaggart

(202) 585-8722

David Martland

dmartland

(617) 345-6145

Christopher Mason Laura Ariane Miller

cmason lmiller

(212) 940-3017 (202) 585-8313

Timothy Mungovan

tmungovan

(617) 345-1334

Carolyn Nussbaum

cnussbaum

(585) 263-1558

Scott O’Connell

soconnell

(603) 628-4087

Julianne Oehlbeck

joehlbeck

(585) 263-1390

Mary Ellen O’Mara

momara

(617) 345-6167

Joseph Ortego

jortego

(516) 832-7564

John Partigan Steven Plevin

jpartigan splevin

(202) 585-8535 (415) 984-8462

Deborah McLean Quinn

dquinn

(585) 263-1307

Joseph Reynolds

jreynolds

(202) 585-8389

Bruce Rosenthal

brosenthal

(212) 940-3009

Peter Rothberg

prothberg

(212) 940-3106

Randall Souza

rsouza

(401) 454-1034

Richard Stein

rstein

(617) 345-6193

Molly Stiles

mstiles

(212) 940-3032

Philip Taub Melissa Tearney

ptaub mtearney

(603) 628-4038 (617) 345-1323

Deborah Thaxter

dthaxter

(617) 345-1326

James Weller

jweller

(516) 832-7543

Visit our web site at www.nixonpeabody.com - 26 -

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