Annual Disclosure Documents 2016

CORPORATE LAW AND PRACTICE Course Handbook Series Number B-2290 Annual Disclosure Documents 2016 Co-Chairs Sandra L. Flow Michael L. Hermsen Mary J. Mullany To order this book, call (800) 260-4PLI or fax us at (800) 321-0093. Ask our Customer Service Department for PLI Order Number 150109, Dept. BAV5. Practising Law Institute 1177 Avenue of the Americas New York, New York 10036

3 Roadmap to Capital Markets Regulatory Changes: Proposed, Potential and Recently Adopted or Enacted Rulemaking and Legislation Relating to the U.S. Capital Markets, Public Company Reporting and Corporate Governance (September 8, 2016) Submitted by: Michael L. Hermsen Mayer Brown LLP Covers rulemaking and legislation adopted or enacted within the prior 3 months or that has been adopted prior to that but the effective date or implementation date has not yet been reached. Covers rulemaking by the US Securities and Exchange Commission, the New York Stock Exchange, the NASDAQ Stock Market, the Financial Industry Regulatory Association and the US Public Company Accounting Oversight Board. Any legislation not enacted before the end of the current term, must be reintroduced in the next Congress. 2016 The Mayer Brown Practices. All rights reserved. If you find this article helpful, you can learn more about the subject by going to www.pli.edu to view the on demand program or segment for which it was written. 269

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PROPOSED Exhibit Hyperlinks and HTML Format. The SEC is proposing to require registrants that file registration statements and periodic and current reports that are subject to the exhibit requirements under Item 601 of Regulation S-K, or that file on Forms F-10 or 20-F, to include a hyperlink to each exhibit listed in the exhibit index of these filings. Disclosure Update and Simplification. The SEC is proposing to amend certain disclosure requirements, primarily accounting and accounting related, that may have become redundant, duplicative, overlapping, outdated, or superseded, in light of other SEC disclosure requirements, U.S. GAAP, IFRS, or changes in the information environment. SEC proposed rules on August 31, 2016 SEC proposed rules on July 13, 2016 Comment period expires 45 days after publication in the Federal Register Comment period expires on October 3, 2016 33-10201 33-10110 4. For SEC matters, Anticipated Action Date is the date indicated by the SEC in the most recently issued Regulatory Flexibility Agenda. 3 271

Revisions to Smaller Reporting Company Definition. The SEC is proposing revisions to the smaller reporting company definitions and related provisions. SEC proposed rules on June 27, 2016 Modernization of Property Disclosures for Mining Registrants. The SEC proposes to modernize the property disclosure requirements for mining registrants, and related guidance, currently set forth in Item 102 of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934 and in Industry Guide 7. SEC proposed rules on June 16, 2016 Auditor s Report on an Audit of Financial Statements when the Auditor Expresses an Unqualified Opinion. The PCAOB is to retain the pass/fail model of the existing auditor s report but is seeking to enhance the form and content of the report to make it more relevant and informative to investors and other financial statement users. In particular, the auditor s report would include a description of critical Rules initially proposed August 13, 2013. Rules re-proposed May 11, 2016. 4 Comment period expires on August 30, 2016 Comment period expires on September 26, 2016 33-10107 33-10098 PCAOB 2016-003 272

audit matters, which would provide auditspecific information about especially challenging, subjective, or complex aspects of the audit as they relate to the relevant financial statement accounts and disclosures. Rules Regarding Incentive Compensation. The SEC, together with the Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Housing Finance Agency, and the National Credit Union Administration (the Agencies ), has reproposed regulations and guidelines with respect to incentive-based compensation practices at certain financial institutions that have $1 billion or more in total assets, as required by the Dodd Frank Act. Rules initially proposed April 14, 2011. Rules re-proposed on May 6, 2016. Section 956 of the Dodd Frank Act requires that the Agencies prohibit incentive-based payment arrangements, or any feature of any such arrangement, at a covered financial institution that the 5 Adopt final rules by April of 2017 34-64140 (initial proposal). 34-77776 (reproposal). 273

Agencies determine encourages inappropriate risks by a financial institution by providing excessive compensation or that could lead to a material financial loss. Under the Dodd Frank Act, a covered financial institution also must disclose to its appropriate Federal regulator the structure of its incentive-based compensation arrangements sufficient to determine whether the structure provides excessive compensation, fees, or benefits or could lead to material financial loss to the institution. Amendments to Facilitate Intrastate and Regional Securities Offerings. The SEC proposes to modernize Rules 147 and 504 under the Securities Act to facilitate intrastate and regional securities offerings. SEC proposed rules on November 10, 2015 Compensation Clawbacks Listing Standards for Recovery of Erroneously Awarded Compensation. Section 954 of the Dodd Frank Act requires the SEC to adopt rules to direct national securities exchanges to prohibit the listing of securities of issuers that have SEC proposed rules on July 14, 2015 6 Adopt final rules by April of 2017 Adopt final rules by April of 2017 33-9973 33-9861. MB Legal Update dated July 16, 2015. 274

not developed and implemented a policy providing for disclosure of the issuer s policy on incentivebased compensation and mandating the clawback of such compensation in certain circumstances. Pay versus Performance. Section 953(a) of the Dodd Frank Act added section 14(i) to the Exchange Act to require issuers to disclose information that shows the relationship between executive compensation actually paid and the financial performance of the issuer. SEC proposed rules on May 7, 2015 Disclosure of Hedging by Employees, Officers and Directors. Section 955 of the Dodd Frank Act added section 14(j) to the Exchange Act to require issuers to disclose in an annual meeting proxy statement whether employees or members of the board of directors are permitted to engage in transactions to hedge or offset any decrease in the market value of equity securities granted to the employee or board member as compensation, or held directly or indirectly by the employee or board member. SEC proposed rules on February 17, 2015 7 Adopt final rules by April of 2017 Adopt final rules by April of 2017 34-74835. MB Legal Update dated May 13, 2015. 33-9723. MB Legal Update dated February 20, 2015. 275

Amendments to Regulation D, Form D and Rule 156 under the Securities Act. The SEC proposed revisions to enhance its ability to evaluate the development of market practices in offerings under Rule 506 of Regulation D and address concerns that may arise in connection with permitting issuers to engage in general solicitation and general advertising under paragraph (c) of Rule 506. SEC proposed rules on July 24, 2013 Reporting of Proxy Votes on Executive Compensation and Other Matters. The SEC proposed amendments to Exchange Act rules and Form N-PX to implement section 951 of the Dodd Frank Act that would require institutional investment managers subject to section 13(f) of the Exchange Act to report how they voted on any shareholder vote on executive compensation or golden parachutes pursuant to sections 14A(a) and (b) of the Exchange Act. SEC proposed rules on October 28, 2010 8 Adopt final rules by April of 2017 Adopt final rules by April of 2017 33-9416. MB Legal Update dated July 25, 2013. 34-63123 276

POTENTIAL Request for Comment on Subpart 400 of Regulation S-K Disclosure Requirements Relating to Management, Certain Security Holders and Corporate Governance Matters. The SEC issued a notice for public comment on disclosure requirements in Subpart 400 Items 401 through Item 407 of Regulation S-K. Implementation of Title I of the JOBS Act. The Division of Corporation Finance is considering recommending that the SEC propose conforming rule amendments to implement Title I of the Jobs Act with respect to emerging growth companies. SEC issued notice on August 25, 2016 Amendments to Interactive Data (XBRL) Program. The Division of Corporation Finance is considering recommending that the SEC propose amendments to the XBRL rules to provide for companies to use Inline XBRL to file a single combined document. 9 Comment period ends on October 31, 2016 Indicated intent to propose rules by April of 2017 Indicated intent to propose rules by April of 2017 33-10198 277

Amendments to Financial Disclosures About Entities Other Than the Registrant. The Division of Corporation Finance is considering recommending that the SEC propose rules revising the financial disclosure requirements in Regulation S-X in connection with financial statements to be included in filings with respect to certain entities other than a registrant. Concept release issued October 1, 2015 Amendments to Regulation S-K and Regulation S- X. The Division of Corporation Finance is considering recommending that the SEC propose rules to update certain disclosure requirements in Regulations S-X and S-K. Universal Proxy. The Division of Corporation Finance is considering recommending that the SEC propose to amend the proxy rules to expand shareholders ability to vote by proxy to choose among all duly-nominated candidates in a contested election of directors. 10 Indicated intent to propose rules by April of 2017 Indicated intent to propose rules by April of 2017 Indicated intent to propose rules by April of 2017 33-9929 278

Corporate Board Diversity. The Division of Corporation Finance is considering recommending that the SEC propose amendments to the proxy rules to require additional disclosure about the diversity of board members and nominees. Indicated intent to propose rules by April of 2017 Shortening the Settlement Cycle. The Division of Trading & Markets is considering recommending that the SEC propose to amend Exchange Act Rule 15c6-1 to shorten the maximum settlement period from three days to two days. Indicated intent to propose by June 2016. Concept Release on Possible Revisions to Audit Committee Disclosures. The SEC published a concept release to obtain information about the extent and nature of the public s interest in revising the audit committee disclosure requirements, which exist in their current form principally in Item 407 of Regulation S-K under the Securities Act and the Securities Exchange Act. Concept release issued July 8, 2015 Indicated intent to propose rules by April of 2017 33-9862 Business and Financial Disclosures. The SEC published for comment a concept release on Concept release issued 33-10064. MB Legal Update 11 279

modernizing certain disclosure requirements in Regulation S-K. April 22, 2016 dated April 26, 2016 Guide 3 Bank Holding Company Disclosure. The Division of Corporation is considering recommending that the SEC seek public comment on revising and updating the general instructions and statistical disclosures in Industry Guide 3. Indicated intent to issue concept release by April of 2017 National Securities Exchange Regulatory Parity Act of 2016 would preempt state blue sky laws for securities that are listed on any SEC-approved exchange, rather than just NYSE and Nasdaq listed securities. Approved by House. Referred to the Senate Committee on Banking, Housing and Urban Affairs on July 13, 2016. H.R. 5421 Fix Crowdfunding Act would, among other things increase from $1 million to $5 million the aggregate amount of securities sold to all investors by an issuer that qualify for the crowdfunding exemption from registration in the Securities Act, amend the Exchange Act to exempt crowdfunding securities transactions from its registration requirements, amend the Investment Company Act Approved by House. Received in Senate on July 6, 2016. H.R. 4855 12 280

to exempt from the definition of investment company any issuer that, for the purpose of making a crowdfunding offering, holds the securities of not more than one issuer eligible to offer securities (a single-purpose fund). Supporting America s Innovators Act of 2016 would amend the Investment Company Act to exempt from its coverage any issuer whose outstanding securities with respect to a qualifying venture capital fund (other than short-term paper) are beneficially owned by not more than 500 persons and define qualifying venture capital fund as one that does not purchase more than $10 million (annually adjusted for inflation) in securities of any one issuer. Approved by the House. Received in the Senate on July 6, 2016. SEC Regulatory Accountability Act would, among other things, revise numerous provisions of the Dodd Frank Act relating to banking organizations and the CFPB, impose enhanced penalties for financial fraud, self-dealing, insider trading and other corrupt practices, repeal sections of the Dodd Frank Act that Introduced to the House Committee on Financial Services on June 9, 2016. 13 H.R. 5854 H.R. 5429 281

limit capital formation, repeal the Dodd Frank Act provisions with respect to resource extraction and conflict minerals and incorporate more than two dozen Committee on Financial Services or House passed capital formation bills, including bills relating to prohibiting the SEC from establishing the investment advisor standard of conduct as the standard of conduct for brokers and dealers, creating a small business forum, amending Regulation D to exclude certain events such as presentations to angel investor groups and creating a safe harbor for distribution of research reports by brokers and dealers distributing securities. 5 5. To be updated once an official summary or the text of the bill has been made available by the House of Representatives. Additional pending legislation will be added at that time. 14 282

Main Street Growth Act would amend the Exchange Act to permit a national securities exchange, for itself or for one of its listing tiers, to elect treatment as a venture exchange by notifying the SEC of such an election either at the time it applies for registration or after registering as a national securities exchange. Unless the SEC denies the registration application within six months after its receipt, the application and election would be deemed to have received SEC approval. Similarly, after a national securities exchange registers, its election to be treated as a venture exchange would be deemed approved unless the SEC denies approval within six months after receiving notice of the election. The bill subjects a venture exchange to certain restrictions, including that it may: (1) only constitute, maintain, or provide a market place or facilities for bringing together purchasers and sellers of venture securities, and (2) not extend unlisted trading privileges to any venture security. With respect to trading on a venture exchange, the bill also exempts from registration Introduced to the House Committee on Financial Services on February 26, 2016. Placed on the Union Calendar on June 8, 2016. 15 H.R. 4638 283

under the Exchange Act certain securities exempted from registration under the Securities Act if the issuer is in compliance with all disclosure obligations and regulations under the latter Act. Also, the Securities Act would be amended to exempt venture securities from state and local government regulation. Proxy Advisory Firm Reform Act would, among other things, require proxy advisory firms to make disclosures about their procedures for advising clients and any potential or actual conflicts of interest, provide every company with access to their draft voting recommendations and allow companies to provide comments to the person who develops the recommendation and review complaints about accuracy and resolve them in a timely fashion. Introduced to the House Committee on Financial Services on May 24, 2016 Fostering Innovation Act of 2015 would amends the Sarbanes-Oxley Act with respect to the requirement that each registered public accounting firm that prepares or issues an audit report for an issuer of securities (other than an emerging growth company) Approved by the House. Referred to the Senate Committee on Banking, Housing and Urban Affairs on May 24, 2016. 16 H.R. 5311 H.R. 4139 284

shall attest to, and report on, the internal control assessment made by the issuer s management so that this requirement would not apply with respect to any audit report prepared for an issuer that: ceased to be an emerging growth company on the last day of its fiscal year following the fifth anniversary of its first sale of common equity securities, had average annual gross revenues of less than $50 million as of its most recently completed fiscal year, and is not a large accelerated filer. In addition, this temporary exemption for lowrevenue issuers would expire upon the earliest of: the last day of the issuer s fiscal year following the tenth anniversary of its first sale of common equity securities pursuant to an effective registration statement under the Securities Act of 1933, the last day of the issuer s fiscal year during which the issuer s average annual gross revenues exceed $50 million, or the date upon which the issuer becomes a large accelerated filer. 17 285

Helping Angels Lead Our Startups (HALOS) Act would direct the SEC to amend Regulation D to make the prohibition against general solicitation or general advertising inapplicable to events with specified kinds of sponsors (including angel investor groups not connected to broker-dealers or investment advisers) where: presentations or communications are made by or on behalf of an issuer, the advertising does not refer to any specific offering of securities by the issuer, the sponsor does not engage in certain activities (such as offering investment recommendations or advice to attendees), the sponsor does not receive compensation for the event which would require registration as a broker or dealer or as an investment advisor, and no specific information regarding a securities offering is communicated (other than that the issuer is in the process of offering or planning to offer securities, including the type and amount of securities being offered). Approved by the House. Referred to the Senate Committee on Banking, Housing and Urban Affairs on April 28, 2016. A comparable bill was introduced to the Senate Committee on Banking, Housing and Urban Affairs on April 16, 2015. H.R. 4498 S. 978 Accelerating Access to Capital Act would direct the SEC to revise Form S-3 so as to permit securities to Approved by the House. H.R. 2357 18 286

be registered pursuant to General Instruction I.B.1. of the form if either: (1) the aggregate market value of voting and non-voting common equity held by nonaffiliates of the registrant is $75 million or more, or (2) the registrant has at least one class of common equity securities listed and registered on a national securities exchange and would require the SEC to remove the existing listing and registration requirement from General Instruction I.B.6. of Form S-3. Micro Offering Safe Harbor Act would amend the Securities Act to exempt from specified prohibitions against the sale or delivery after sale of unregistered securities, among other things, transactions involving the sale of securities by an issuer of micro-offerings that meet one or more of the following criteria: (i) each purchaser has a substantive pre-existing relationship with either an officer or director of the issuer, or with a shareholder holding 10% or more of the issuer s shares; (ii) during the 12-month period preceding the transaction there are no more than 35 Approved by the House. H.R. 4850 19 287

purchasers of such micro-offerings sold in reliance on this exemption; and (iii) the aggregate amount of all securities sold by the issuer (including any amount sold in reliance upon the exemption) during the 12-month period preceding the transaction does not exceed $500,000 and would exempt such microofferings from state regulation of securities offerings. Private Placements Improvements Act of 2016 would direct the SEC to revise the filing requirements of Regulation D to require an issuer that offers or sells securities in reliance upon Rule 506 to file, no earlier than the date of first sale of such securities, a single notice of sales containing the information required by Form D for each new offering of securities. It would also direct the SEC to not: (1) require an issuer to file any notice of sales containing the information required by Form D except for this single notice; (2) condition the availability of the Rule 506 exemption upon the filing of a Form D or similar report; or (3) require issuers to submit written general solicitation materials in Approved by the House. H.R. 4852 20 288

connection with a limited offering subject to Rule 506, except when it requests such materials pursuant to specified authority. It would direct the SEC to revise Rule 501(a), regarding a Rule 506 offering of a private fund, to characterize as an accredited investor a knowledgeable employee of that private fund or the fund s investment adviser and would prohibit the SEC from extending to private funds the requirements governing investment company sales literature. Brokaw Act would direct the SEC to amend Regulation 13D-G to reflect a revision the bill makes to the Exchange Act reducing from 10 to 2 business days the deadline for disclosing to the SEC any acquisition of a direct or indirect short interest in an equity security of a certain kind of voting class that results in a direct or indirect short interest representing more than 5% of that class. The bill would deem a person as having a short interest in a security if the person has the opportunity, either directly or indirectly, to profit from, or share in any Introduced to the Senate Committee on Banking, Housing and Urban Affairs on March 17, 2016 21 S. 2720 289

profit derived from any decrease in the value of the security (including a derivative instrument, or a performance-related fee). The bill would deem a person to have a short interest in a security if the person creates or uses certain instruments, including a trust, proxy, power of attorney, pooling arrangement, or any other contract, arrangement, or device, to divest the person of a short interest in a security or to prevent the vesting of a short interest as part of a plan to evade the reporting requirements of the Act. Capital Markets Improvement Act of 2016 would direct the SEC to revise regulations to require an issuer to furnish investors with additional specified disclosures regarding compensatory benefit plans if the aggregate sales price or amount of securities sold during any consecutive 12-month period exceeds $10 million (currently $5 million), indexed for inflation every five years, create a safe harbor for certain publications or distributions of research reports by brokers or dealers distributing securities, exempt emerging growth companies and issuers with Approved by the House. Referred to the Senate Committee on Banking, Housing and Urban Affairs on February 4, 2016. 22 H.R. 1675 290

total annual gross revenues of less than $250 million from the requirement to use XBRL for financial statements and other mandatory periodic reports filed with the SEC and within 5 years after enactment of this Act, and thereafter at least once within each 10-year period, require the SEC to: review each significant regulation it has issued; determine by vote whether it is ineffective, excessively burdensome, unnecessary, or inconsistent with its mandate; solicit public comment as to whether the regulation should be amended or repealed; and subsequently amend or repeal accordingly. SEC Small Business Advocate Act would amend the Exchange Act to establish within the SEC an Office of the Advocate for Small Business Capital Formation and establish the Small Business Capital Formation Advisory Committee to provide the SEC with advice on SEC rules, regulations, and policies regarding its mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation, as they relate to: capital Approved by the House. Referred to the Senate Committee on Banking, Housing and Urban Affairs on February 2, 2016. 23 H.R. 3784 291

raising by emerging, privately held small businesses and publicly traded companies with less than $250 million in public market capitalization through securities offerings; trading in the securities of such businesses and companies; and public reporting and corporate governance requirements of such businesses and companies. Fair Investment Opportunities for Professional Experts Act would amend the Securities Act to add to the definition of accredited investor any natural person whose individual net worth, or joint net worth with his or her spouse, exceeds $1 million (adjusted every five years for inflation), whose individual income exceeded $200,000 in each of the two most recent years, or whose joint income with spouse exceeded $300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year; who is currently licensed or registered as a broker or investment adviser by the SEC, FINRA (or an equivalent self-regulatory organization), or a state division responsible for Approved by the House. Referred to the Senate Committee on Banking, Housing and Urban Affairs on February 2, 2016. 24 H.R. 2187 292

licensing or registration of individuals in connection with securities activities; or whose demonstrable education or job experience qualifies as professional knowledge of a subject related to a particular investment, and whose education or job experience is verified by the FINRA or an equivalent selfregulatory organization. GROW Act would amend the Sarbanes-Oxley Act to exempt from the auditor attestation of internal control assessments an issuer of securities whose total market capitalization is less than $2 billion. Introduced to the House Committee on Financial Services on November 3, 2015. Streamlining Excessive and Costly (SEC) Regulations Review Act would require the SEC, within 5 years after enactment of this Act, and thereafter at least once within each 10-year period, to: review each significant regulation it has issued; determine by vote whether it is ineffective, excessively burdensome, unnecessary, or inconsistent with its mandate; solicit public comment as to whether the regulation should be amended or Introduced to the House Committee on Financial Services on May 15, 2015. Placed on the Union Calendar on January 28, 2016. 25 H.R. 3891 H.R. 2354 293

repealed; and subsequently amend or repeal accordingly. Small Company Disclosure Simplification Act would exempt emerging growth companies and issuers with total annual gross revenues of less than $250 million from the requirement to use XBRL for financial statements and other mandatory periodic reports filed with the SEC. Introduced to the House Committee on Financial Services on April 22, 2015. Placed on the Union Calendar on January 28, 2016. Insider Trading Prohibition Act would amend the Exchange Act to prohibit any person from trading securities or effectuating such trades while in possession of related material, nonpublic information, or while either knowing or recklessly disregarding that the information has been obtained wrongfully, or that the transactions would constitute a wrongful use of such information and make it unlawful for any person whose own securities transactions violate this Act to communicate wrongfully to another person material, nonpublic information Introduced to the House Committee on Financial Services on March 25, 2015. 26 H.R. 1965 H.R. 1625 294

relating to either those transactions or the market for them if the other person: purchases, sells, or causes the purchase or sale of, any security or security-based swap or enters into or causes the entry into any security-based swap agreement, to which such communication relates; or communicates the information to another person who makes or causes such a transaction while in possession of such information. Encouraging Employee Ownership Act would direct the SEC to revise regulations to require an issuer to furnish investors with additional specified disclosures regarding compensatory benefit plans if the aggregate sales price or amount of securities sold during any consecutive 12-month period exceeds $10 million (currently $5 million), indexed for inflation every five years. Introduced to the Senate Committee on Banking, Housing and Urban Affairs on February 26, 2015. 27 S. 576 295

Promoting Job Creation and Reducing Small Business Burdens Act would, among other things, exempt emerging growth companies and issuers with total annual gross revenues of less than $250 million from the requirements to use XBRL for mandatory periodic reports filed with the SEC and would direct the SEC to revise Rule 701 to require an issuer to furnish investors with additional specified disclosures regarding compensatory benefit plans if the aggregate sales price or amount of securities sold during any consecutive 12-month period exceeds $10 million (currently $5 million), indexed for inflation every five years. Other provisions of the Act have been adopted as part of the FAST Act. Approved by the House. Referred to the Senate Committee on Banking, Housing and Urban Affairs on January 16, 2015. RECENTLY ADOPTED OR ENACTED Golden Leash Payments Disclosure of Compensation or Other Payments by Third Parties to Board of Director s Members or Nominees. Nasdaq adopted Rule 5250(b)(3) SEC approved rules on July 1, 2016 28 New rule effective July 31, 2016 H.R. 37 33-78223. MB Legal Update dated July 18, 2016. 296

to require each Nasdaq-listed company to publicly disclose the material terms of all agreements or arrangements between any director or nominee for director on the company s board and any third party other than the company relating to compensation or other payment in connection with that person s candidacy or service as a director. The disclosure would require a Nasdaq-listed company to disclose this information either on or through the company website or in the definitive proxy or information statement for the next shareholders meeting at which directors are elected (or, if the company does not file proxy or information statements, in its Form 10-K or Form 20-F). Disclosure of Payments by Resource Extraction Issuers. Section 1504 of the Dodd Frank Act added section 13(q) to the Exchange Act requiring resource extraction issuers to disclose in an annual report payments made to foreign governments or the Federal SEC adopted rules on June 27, 2016 29 A resource extraction issuer must comply with the final rule and form for fiscal years ending on or after September 30, 2018 34-78167. MB Legal Update dated July 13, 2016 297

Government for the purpose of commercial development of oil, natural gas or minerals. Improving the Transparency of Audits: Rules to Require Disclosure of Certain Audit Participants on a New PCAOB Form and Related Amendments to Auditing Standards. The PCAOB adopted new rules and related amendments to its auditing standards that will improve transparency regarding the engagement partner and other accounting firms that took part in the audit. The rules will require disclosure of the name of the engagement partner and information about other accounting firms on new PCAOB Form AP, Auditor Reporting of Certain Audit Participants to be filed with the PCAOB by the independent auditor. SEC approved rules on May 9, 2016 Pay Ratio Disclosure. The SEC adopted rules to require disclosure of the median of the annual total compensation of all employees of a registrant (excluding the chief executive officer), the annual total compensation of that registrant s chief executive SEC adopted rules on August 5, 2015 30 Effective for audit reports issued on or after January 31, 2017 with respect to disclosure of the engagement partner and for audit reports issued June 30, 2017 with respect to disclosure of other accounting firms Registrants must comply with the final rule for the first full fiscal year beginning on or after January 1, 2017 34-77787 33-9887. MB Legal Update dated August 20, 2015. 298

officer, and the ratio of the median of the annual total compensation of all employees to the annual total compensation of the chief executive officer. 10-K Summary Page. The SEC adopted interim final rules implementing section 72001 of the FAST Act by permitting issuers to submit a summary page on Form l0-k. SEC adopted interim fina rules and proposed comment on those rules on June 1, 2016 Changes to Exchange Act Registration Requirements to Implement Title V and Title VI of the JOBS Act. The SEC adopted amendments to rules to implement Titles V (Private Company Flexibility and Growth) and VI (Capital Expansion) of the JOBS Act to reflect the new, higher thresholds for registration, termination of registration and suspension of reporting that were set forth in the JOBS Act, apply the thresholds specified for banks and bank holding companies to savings and loan holding companies, and to revise the definition of held of record in Rule 12g5-1, in accordance with the JOBS Act, to exclude certain securities held by SEC adopted final rules on May 3, 2016 31 New rule effective June 9, 2016. Comment period ends July 11, 2016. 34-77969 June 9, 2016 33-10075. MB Legal Update dated May 12, 2016. 299

persons who received them pursuant to employee compensation plans and establish a non-exclusive safe harbor for determining whether securities are held of record for purposes of registration under Section 12(g). Simplification of Disclosure Requirements for Emerging Growth Companies and Forward Incorporation by Reference on Form S-1 for Smaller Reporting Companies. The SEC adopted interim final rules to implement sections 71003 and 84001 of the FAST Act, which revise Forms S-1 and F-1 to permit emerging growth companies to omit financial information for certain historical periods and revise Form S-1 to permit forward incorporation by reference for smaller reporting companies. The Commission also requested comment on the interim final rules. SEC adopted interim final rules and proposed comment on those rules on January 13, 2016 32 New rules effective January 19, 2016. Comment period ends February 18, 2016. 33-10003 300

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