12/27/06: More executive compensation rule changes

In particular, the SEC has changed the disclosure for stock and option awards to executive officers and directors to more closely conform to their treatment under FAS 123R in annual financial statements. Key aspects of these changes include:

1. In the summary compensation table, the dollar values for stock awards and option awards will be based on the compensation cost of those awards, before reflecting forfeitures, over the requisite service period (i.e., this is an amortized amount rather than an aggregate up-front value in the year of grant). This change could impact who is determined to be a "Named Executive Officer" since it directly impacts the Total compensation. Actual forfeitures will need to be reflected at the time of forfeiture.

2. The Grants of Plan-Based Awards table is revised to require disclosure of the full grant date fair value of each individual equity award (i.e., on a grant-by-grant basis) and the Director Compensation Table is revised to require footnote disclosure of the same information.

3. The Grants of Plan-Based Awards table is revised to require disclosure of any option or SAR that was repriced or otherwise materially modified during the last fiscal year and the Director Compensation Table is revised to require footnote disclosure of the same information.

4. If a named executive officer elects to forgo cash compensation in favor of equity compensation, additional disclosure will now be required.

5. The FAS 123R value of certain awards prior to 2006 may need to be reflected in the 2006 summary compensation table for portions reflected in 2006 financial statements. Special transition rules apply.

The full text of these amendments can be found at: http://www.sec.gov/rules/final/2006/33-8765.pdf.